Volume Author/Editor: Simon Kuznets, assisted by Elizabeth Jenks. Volume URL:

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1 This PDF is a selecion from an ou-of-prin volume from he Naional Bureau of Economic Research Volume Tile: Shares of Upper Income Groups in Income and Savings Volume Auhor/Edior: Simon Kuznes, assised by Elizabeh Jenks Volume Publisher: NBER Volume ISBN: X Volume URL: hp:// Publicaion Dae: 1953 Chaper Tile: Addendum: Correcions and Revisions Chaper Auhor: Simon Kuznes, Elizabeh Jenks Chaper URL: hp:// Chaper pages in book: (p )

2 Addendum: Correcions and Revisions In a proraced saisical sudy of he ype repored here, he compleion of analysis is almos ineviably followed by he unearhing of slips ha occurred in making he compuaions and by revisions in he source maerial. When such errors and revisions are major, eiher in magniude or in heir effec on he analysis, here is no recourse excep o recalculae and revise. Forunaely, some errors are so minor ha laborious recalculaion is unwarraned; and some curren revisions of recen daa may affec only s, shor an inerval or so small a componen ha i is permissible no o incorporae hem ino he analysis. We can hen merely indicae he errors and revisions in an addendum, acked on like he presen one o he body of he repor, for echnically minded readers who migh wish o use hem in any recalculaions of heir own.

3 ,353 88, ADDENDUM Addendum Table 1 Correcion of Nonfarm Populaion and of Percenage Shares of Upper Income Groups in Income of Nonfarm Populaion Basic Varian, Nonfarm Populaion, NONFARM POPULATION, MIDYEAR ESTIMATE (000) 1 (1) (2) SHARES OF Top GIVEN PERCENTAGE BAND 2nd & 4h & Top 6h & Top 3rd 5h 5 7h 7 (3) (4) (5) (6) (7) , , , , , , , , , , , , : , , , , , , , : , , , , : , , , , , , , , , , , , , , , , , , , , ,

4 CORREC.TIONS AND REVISIONS 701 Addendum Table 1: Correcion of Nonf arm Populaion, Because of inadequae labeling in he original source, he figures for farm populaion used in our basic calculaions and inerpreed as applying o he. middle of he calendar year were in fac for he beginning. Our calculaions for are, herefore, in error in ha we derived nonfarm populaion for each year by subracing from midyear figures for oal populaion beginning-of--year figures for farm populaion. Column 1 of Addendum Table 1 presens he correc figures, which can be compared wih he series used in our calculaions and given in column 1 of Table 115. The differences are naurally minor. Bu he quesion of mos imporance o us is no he error in he populaion figures bu in he income shares of he upper percenage bands of he nonfarm populaion. We herefore recalculaed he shares, using he correced nonf arm po.pula ion figures (col. 2-7); hese can be compared wih hose for used hroughou he analysis (Table 116, col. 4 and 5, successive secions; also Tables 119 and 121). The difference beween he correced and he originally calculaed shares is so minor as o be of lile analyical significance. For example, in comparing he wo series on he share of he op 1 percen, we find (using he series based on Naional Bureau of Economic Research income oals hrough 1938, and'ha based on Deparmen of Commerce income oals beginning wih 1939) ha in fifeen years he enries are idenical hrough he second decimal place, and ha in almos all he remaining weny years, he difference is eiher 0.01 or 0.02 percenage poins. In only wo years, 1942 and 1945, is i larger 0.05 and 0.03 percenage poins respecively. Obviously, subsiuion of he correced series would have made no difference in our conclusions, and he laborious recompuaions would have been useless. Noes o Addendum Table 1 * The esimaes for 1948 are no subjec o his correcion. Column 1 Correcion of column 1 of Table 115 hrough 1947: oal populaion, Table 69, column 5, minus midyear esimaes of he farm populaion calculaed by averaging pairs of January 1 figures shown in he Farm income Siuaion, Augus' 1950, Table 3, p Shares in he basic varian in Tables 116, 119, and 121 recompued o ake accoun of he correced populaion series in column 1.

5 702 ADDENDUM Addendum Tables 2 and 3: Revision of Populaion and Income Series, Afer he basic calculaions for he repor had been compleed, minor revisions of he oal populaion series for he years beginning wih 1940, and somewha larger revisions of he Deparmen of Commerce income esimaes for he years beginning wih 1942, were published. (A revision of he Deparmen of Commerce income esimaes for 1948 was disregarded as oo sligh o warran he necessary recompuaions.) These new series are presened in Addendum Table 2, and he noes o i provide references o he ables in he repor ha conain he corresponding old series. Here again our ineres is exclusively in he effec of he revisions on he esimaes of income shares of upper percenage bands and we herefore recalculaed hem. The resuls are given in Addendum Table 3, ogeher wih he shares compued from he unrevised series and used hroughou he analysis. A glance a he enries for 1940 and 1941 in Par A shows ha he effecs of he revision of populaion alone are quie minor. The revised shares differ from he unrevised by jus a few poins in he second decimal place; and he differences are, o all inens and purposes, so small ha hey can be safely disregarded. The revisions of he income series beginning in 1942 have a more percepible effec. Bu even hese are negligible for he shares in oal income (Par A). The only change worh noing is in 1947: he revision increases slighly he shares of upper income groups from 8.49 percen o 8.63 for he op 1 percen of oal populaion, and from o for is op 5 percen. In comparison wih he major decline in he shares from 1940 o 1947, hese changes are so small ha hey can hardly affec any ofour conclusions. This is rue also of he effecs of revisions by income ype even hough he changes in he shares in some ypes are more marked (Par B)..The larges changes are in he shares in enrepreneurial income and in ren. For mos years beginning wih 1942 he revision raised he level of enrepreneurial income, and hence lowered he shares received by upper income groups. For mos years he revision of he level of ren was downward, which increased he upper group shares in i. Bu even for hese wo income ypes, he revisions are no so large ha eiher he level of he upper group shares or heir movemen over ime is significanly affeced. And his is all he more rue of he revisions of he shares in he oher income ypes (employee compensaion, dividends, and ineres) which are quie insignifican.

6 -4 Addendum Table 2 Populaion and Income Aggregaes Revised o Take Accoun of Laes Published Esimaes, 1 Toal 0/ Non/arm Toal Populaion col. 5) (mu (5) (6) (7) (1) (2) (3) (4) , , , ,859 49,094 f , ,977 83,939 79,435 23,236 12, , , , , ,669 26,699 15, , , , , ,172 28,862 17, , , , , ,926 31,123 18, , , , , ,997 36,919 22, , , , , ,983 36,602 21, ,713 * The series for 1948 in he body of he repor are comparable wih hose for preceding years in his able. The revision of he underlying Deparmen of Commerce income esimaes for his year in he Survey o/ Curren Business, 1951 Naional income Supplemen, was disregarded as oo sligh o warran he necessary recompuaions. Same as unrevised series. Column I Revision of column 5 of Table 69: Bureau of Census release P-25, Revision of column I of Addendum Table 1: column I minus midyear esimaes of he farm populaion calculaed by averaging pairs of January 1 figures shown in he Farm income Siuaion, Augus 1950, Table 3, p. 26. See also noes o Addendum Table 1, column 1. 3, 5, 6,9, Revision of columns 1, 3, 4, 7, 8, and 10 of Table 114: derived 10, 12 from he Survey of Curren Business, July 1950, Tables 1, 3, 36, Service Incomes Of Non/arm Populaion (col. 15 col. 13) lions (8) 56,866 92, , , , , ,306 Column Dlvi- Inerdends es of dolla (9) 4,297 4,493 4,680 4,699 5,808 6,561 (10) 3,097 3,088 3,240 3,707 4,154 4,584 Dividends and Ineres (col. 9 + col. 10) rs) (11) ṭ1. 7,394 7,581 7,920 8,406 9,962 11,145 Propery Incomes (col.11 + Ren col. 12) (12) 3,466 3,877 3,972 3,860 4,318 4,712 (13) 10,860 11,458 11,892 12,266 14,280 15,857 Toal Income 0/ Non- Toal farm (col.7 + Popucol. 13) laion (14) (15) 66, , , , , , , , , , , , ,163 37, and 39, pp. 9-27, and an unpublished esimae of ne ren on owner-occupied farm dwellings supplied by he Deparmen of Commerce, Naional Income Division. The procedure is ha indicaed in he noes o he unrevised series. 4 Revision of column 2 of Table 114: column 8 minus column 6. 7, 8, 11, 1'3 Revision of columns 5, 6, 9, and 11 of Table Revision of column 12 of Table 114 and column 2 of Table Revision of column 13 of Table 114 and column 2 of Table 115: column 14 minus he income of he farm populaion caiculaed by he procedure indicaed in he noes o Appendix 3, Secion 3, column 8, from he series in he Farm income Siuaion, Augus 1950, and from a revised esimae of agriculural income received by he farm populaion supplied by he Deparmen of Commerce, Naional Income Division. No.

7 2 Addendum Table 3 - Percenage Shares of Upper Income Groups Revised o Take Accoun of Laes Published Esimaes of Populaion and Income A SHARES OF GIVEN PERCENTAGE BAND TOTAL INCOME, BASIC VARIANT Top 1 2nd & 3rd 4h & 5h Top 5 6h & 7h Top 7 Un- Un- Un- Un- Un- Un- Revised revised Revised revised Revised revised Revised revised Revised revised Revised revised (1) (2). (3) (4) (5) (6) (7) (8) (9) (10) (11) (12) TOTAL POPULATION NONFARM POPULATION For noes see page

8 CORRECTIONS AND REVISIONS 705 Addendum Table 3 (con.) B SHARES OF GIVEN PERCENTAGE BAND OF TOTAL POPULATION IN VARIous TYPES OF INCOME Top 1 2nd & 3rd 4h & 5h Top 5 Re- Unre- Re- Unre-. Re- Unre- Re- Unrevised vised vised vised vised vised vised vised (1)' (2) (3) (4) (5) (6) (7) (8) EMPLOYEE COMPENSATION ENTREPRENEURIAL INCOME SERVICE INCOMES DIVIDENDS ' INTEREST f 1945 j. j.. f DIVIDENDS AND INTEREST For noes see page

9 706 ADDENDUM Addendum Table 3 (conci.) B SHARES OF GIVEN PERCENTAGE BAND TOTAL IN VARIOUS TYPES OF INCOME (conci.) Top 1 2nd & 3rd 4h & 5h Top 5 Re- Unre- Re- Unre- Re- Unre- Re- Unrevised vised vised vised vised vised vised vised (1) (2) (3) (4) (5) (6) (7) (8) RENT PROPERTY INCOMES Noes o Addendum Table 3 * See Addendum Table 2, aserisk noe, regarding series for f Basic daa are no available for separae esimaes of dividends and ineres. Column PART A 1, 3, 5, Shares in columns 2, 4, 6, 8, 10, and 12 recompued o ake accoun of 7, 9, 11 revised counrywide series in Addendum Table 2, columns 1, 2, 14, and 15. 2,4,6, Toalpopulaion: column 1 of Tables 106, 107, 108, 116, 118, and , 10, 12 Nonfarm populaion: Table 116, columns 4 and 5; Table 119, column 1; Table 121, column 1. PART B 1, 3, 5, 7 Shares in columns 2, 4, 6, and 8 recompued o ake accoun of revised counrywide series in Addendum Table 2, columns 1, 3, 5, 7, and Since he revised shares for 1940 and 1941 differ only slighly from he unrevised hey are no repeaed here. We have no recompued he shares of he upper income groups of nonfarm populaion in Table , 4, 6, 8 Tables 109 and 123.

Answer Key for Week 3 Homework = 100 = 140 = 138

Econ 110D Fall 2009 K.D. Hoover Answer Key for Week 3 Homework Problem 4.1 a) Laspeyres price index in 2006 = 100 (1 20) + (0.75 20) Laspeyres price index in 2007 = 100 (0.75 20) + (0.5 20) 20 + 15 = 100