Household Income Distribution And Market Returns

Abstract

Income distribution is a topic that has drawn much attention from many sectors of our society. Whether or not the distribution of income has become more unequal over time is an issue that can affect political decision-making, social policy, and social attitudes. Further, do stock market returns play a role in the distribution of income? It may be reasonable to hypothesize that wealthy individuals invest and earn more in equities than do poor or middle income individuals, thus contributing to income inequality. This study analyzes, by ethnic group, the issue of income distribution and the impact of the stock market returns on income distribution. Results of this study indicate that although the distribution of income has become more unequal, the stock market does not have a measurable impact.