Distribution

Distribution in economics refers to the way total output, income, or wealth is distributed among individuals or among the factors of production (such as labour, land, and capital).( http://en.wikipedia.org/wiki/Distribution_economics)

According to Richard Musgrave (1959), distribution is one of the three functional branches of government (the other two are stabilization and allocation). Distribution is different from allocation because its goal is equitable income distribution, rather than efficient resource use. Distribution is a representative of normative economics (content from Musgrave, Richard A. (1959). The Theory of Public Finance: A Study in Public Economy). Most often it refers to progressive redistribution, from the rich to the poor, although it may also refer to regressive redistribution, from the poor to the rich. The progressive income tax that the US Government practices now is a kind of progressive distribution (content from Wikipedia).http://en.wikipedia.org/wiki/Income_redistribution

Figure 1 is an example of how a subsidy (a type of distribution) for a good (Good Y in the figure) will increase the amount of the subsidized good purchased by a greater portion than it increases the amount of the non-subsidized good purchased (Good X), as a result of the substitution effect.(http://en.wikipedia.org/wiki/Income_redistribution)

By Qi Shen