Stamm, K. Brad

Christian Business Academy Review

36Chewing — Book Review: Income DistributionBOOK REVIEWIncome DistributionEducators who believe that Christian college-level pro-grams should be committed to educating and informingstudents in such areas as poverty, globalization, economicdevelopment, and redistribution, might consider utilizingIncome Distribution, by Fred Campano and DominickSalvatore. The book integrates both theory and economet-rics within a historic framework, providing analytical toolsthat will enable instructor and students to more clearlyunderstand and define inequality of income and economicdepravity, as well as open the door for providing relief tothose deprived of basic necessities This is not a “Christian” text per se. However, theimplications and applications are thoroughly Christian.Pertinent and important questions are posed regarding lev-els of government intervention and the amount of assis-tance provided by churches or non-governmental organiza-tions. Apt responses to these questions should be found inbusiness and economics courses generally taught atChristian colleges and universities that integrate and applya Christian worldview. The book is intended for advanced undergraduates orgraduate students who have had a standard statisticscourse. “Income Distribution” is international in scope,statistical in nature, succinct yet comprehensive in itsapproach, and pragmatic from beginning to end. This textcould be used as an ancillary in an economic developmentcourse, a statistics course, as part of a business ethics class,or in a stand-alone course in economic development oreconometrics. The book includes useful software to com-plete the end-of-chapter problems which cover everythingfrom creating histograms of income distribution to deter-mining the Dagum cumulative distribution function for acountry.Early on the authors confidently and lucidly point outthe fallacies of using “headcount” and GDP per capita tomeasure poverty. They also discuss Sen’s index, which cap-tures the “weak law of transfer;” provide a description ofthe characteristics of developing countries; argue againstusing IMF market exchange rates to make cross-countrycomparisons; and present a thorough critique of Kuznets’U-Shaped hypothesis.In chapter 11, “Growth and Poverty in a GlobalizingWorld,” Campano and Salvatore provide the backgroundfor a healthy Christian worldview discourse on topics suchas importation of labor, outsourcing manufacturing, andcreation of back-office operations in Bangalore and else-where. The authors also compare the economic growthrates of both globalizing and non-globalizing countries andthe effects of each upon income distribution.The authors survey and provide examples of usefulanalytical tools including the Dagum, log-logistic,Champernowne, and Singh-Maddala models. On a moreelementary level, they depict how to create the LorenzDiagram and estimate the Gini coefficient. As an addedbonus the reader is taken through the process of calculatingthe Paglin-Gini coefficient where Paglin corrects theLorenz-Gini in order to adjust for the family life cycle,given that incomes across all families are not the same atone point in time.The last few chapters outline the different measures ofabsolute and relative poverty. These topics are then expand-ed to include the socioeconomic impact of various incomeredistribution schemes and the utilization of regressionanalysis to show the relationship of GDP growth and shareof income flowing to various quintiles. Almost everyone would agree that to tell someone “beK. BRAD STAMMCornerstone Universitybrad_stamm@cornerstone.eduREFERENCESCampano, F. and Salvatore, D. (2006). IncomeDistribution. New York: Oxford University Press.37warmed and fed” and do nothing about it is not true reli-gion, and that the appropriate response is to provide food,clean water, and clothing to those whose basic needs are notmet. We might, however, disagree on the means of treatingor solving issues of poverty and inequality. Even within theChristian Business Faculty Association there is not unanimi-ty but rather a lively discourse on what methods are best forsolving the issues. The extremes might be to merely tellsome to “pull yourself up by your own bootstraps,” toapplying various methods of redistribution via governmentagencies, the World Bank, or social organizations.Motive, method, and mandate are important and nec-essary when discussing poverty and how to alleviate it.However, without proper measurement and definition ofpoverty and income inequality, we cannot know where andhow much to redistribute, to whom, in what form, andwhether our efforts in providing tools and education forindividuals and groups are misdirected. “Income distribution issues are the core of almost alleconomic policies,” according to the authors. I would sug-gest that while it is not the nucleus of our faith, an activefaith will pursue and be engaged in solving issues of eco-nomic inequity in our world. Dominick Salvatore and FredCampano in their book Income Distribution give us valu-able and valid means of measuring income distribution,allowing us to more effectively, efficiently, and, perhaps,ethically provide the means for an improved standard ofliving to those in need.CBAR Spring 2008

Book Review: Income Distribution

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Book Review: Income Distribution

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