Economic aspects of regional welfare : Income distribution and unemployment

This book is the product of research which I undertook for my doc­ toral thesis. The project was started whilst I was at the Free Univer­ sity of Amsterdam, and the State University of Groningen gave me ample opportunity to complete the work. At both universities I was lucky enough to find kind colleagues who were willing to perform my teaching tasks, enabling me to spend much of my time some of on my research. I should like to thank Wietze Boomsma, Kees van den Hoeven and Jan Oosterhaven for their kind help. I was also most encouraged to discover several students at both institutions who were interested in the research topic. This meant that some research could be performed with their co-operation, which proved most stimulating. Harry ter Braak and Henk van Metelen were especially enthusiastic helpers. During the initial stage of research, Fons Bertens did a great deal of meticulous work, with never a com­ plaint. In the final stages, Arend Stemerding helped me greatly. The completed manuscript was read by Nol Merkies and Peter Nijkamp, who had some helpful comments on the contents. Pro­ fessor Nijkamp succeeded in stimulating me during the research by his interest in the project and subsequent edifying discussions. Several persons helped to type the manuscript, but Yvonne van Tuyl took the lion's share, typing a perfect final copy in record time.

Content.- 1. Introduction.- 1.1. Study of welfare aspects in economics.- 1.2. Disparities in regional welfare.- 1.3. Selection of regional welfare elements.- 1.4. Methods.- 1.5. Layout.- 2. Statistical and Related Income Inequality Measures, With No Explicit Specification of a Probability Density- or Welfare-Function.- 2.1. The concept of an inequality measure.- 2.2. Notations.- 2.3. Statistical and other non-welfare-based inequality measures with an unspecified p.d.f..- 2.3.1. Partial statistical indicators of dispersion.- 2.3.2. Functions of simple location parameters and ordinary moments.- 2.3.3. The first absolute moment and related inequality measures.- 2.3.4. The mean difference and related measures.- 2.3.5. Some general divergence measures.- 2.3.6. Some measures related to entropy.- 2.4. A partial evaluation of statistical and related inequality measures.- Appendix 2A. Elementary definitions.- Appendix 2B. Partial statistical indicators of dispersion.- Appendix 2C. Decomposition formulae.- 3. Explicit Probability Density Functions of Income.- 3.1. The usefulness of an explicit probability density function of income.- 3.2. Alternative approaches and selection criteria for defining a set of p.d.f.s.- 3.3. A direct definition of a skew p.d.f. of income.- 3.4. A definition of a skew p.d.f. of income using transformations.- 3.4.1. The lognormal distribution.- 3.4.2. The inverse hyperbolic sine normal distribution.- 3.4.3. The log logistic or sech distribution.- 3.4.4. The Champernowne distribution.- 3.4.5. The log Student p.d.f..- 3.4.6. The Box Cox Champernowne distribution.- 3.4.7. The Beta distribution.- 3.5. A preliminary evaluation of some p.d.f.s.- 3.6. Methods of parameter estimation.- 3.7. Aspects of goodness of fit.- 3.8. Concluding remarks.- Appendix 3A. The Pareto distribution.- 4. Income Inequality Measures and Welfare Functions of Income.- 4.1. The use of a welfare function of income.- 4.2. A partial group welfare function of incomes.- 4.3. An additive individualistic welfare approach to income inequality measurement.- 4.4. Non-additivity of individual welfare levels and inequality measurement.- 4.5. An evaluation of the welfare approach.- 5. Inequality Measures with Explicit Statements on Weights and Reference Distribution.- 5.1. Introduction.- 5.2. Specification of a target income distribution.- 5.3. Indices of divergence from a target distribution.- 5.4. Relevance of the approach.- 6. Intra-Regional Income Distributions in the Netherlands.- 6.1. Introduction.- 6.2. Personal income data for COROP regions.- 6.3. Some location parameters for intra-regional income distributions.- 6.4. Inequality measures for intra-regional income distributions: some general remarks.- 6.5. Statistical and related inequality measures: empirical results.- 6.6. Inequality measures based on a welfare function: empirical results.- 6.7. Selection of a p.d.f. of income: empirical results.- 6.8. Associations between inequality measures: empirical results.- 6.9. Selection of attractive inequality measures.- 6.10. Interpretations of results of inequality measures.- Appendix 6A. Definition of taxable income 1969.- 7. An Exploratory Statistical Analysis of Regional Unemployment.- 7.1. Indicators of unemployment as elements of the regional welfare profile.- 7.2. Unemployment data and concepts.- 7.3. Statistical assumptions.- 7.4. An elementary statistical analysis.- 7.5. Auto-spectral analysis.- 7.6. Cross-spectral analysis.- 7.7. Principal components analysis of the spectral estimates.- 7.8. Evaluation of the results.- 8. Variables Associated with Intra-Regional Income Distributions.- 8.1. An empirical analysis of associated variables.- 8.2. Variables influencing personal incomes.- 8.3. Economic theories to explain personal incomes.- 8.4. Estimation of a relation for the level of regional income.- 8.5. Estimation of a relation for intra-regional income inequality.- 8.6. An attempt to reveal implicit social norms simultaneously.- 8.7. Some final remarks.- Appendix 8A. Data on selected intra-regional variables.- 9. An Explanatory Model of Labour Market and Income Distribution.- 9.1. Integration of welfare elements in a comprehensive framework.- 9.2. Specification of labour market relations.- 9.2.1. Demand for labour.- 9.2.2. Labour supply.- 9.2.3. Discrepancies on the labour market.- 9.3. Regional income and its distribution.- 9.4. The availability of data.- 9.5. Some final remarks.