Income distribution effects of technical change : some analytical issues

Abstract

This paper is a review of partial and general equilibrium approaches to analysis of distributional consequences of technical change, using examples from the agriculture sector. Some existing models are recast and refined so as to make them more amenable to empirical analysis. The distributional problem associated with technical change in agriculture breaks down into four subproblems: (i) distributional effects among producers of a given region; (ii) producers versus consumers; (iii) landowners versus consumers; (iii) landowners versus workers; and (iv) distributional consequences among regions. Specific models are presented and analyzed, and it is concluded that the question is not one of partial versus general equilibrium analysis but of the particular problem at hand. In attempting to predict effects of technical change is a formidable task; it is necessary to know the characteristics of the technology, the characteristics of the region where it occurs, and the characteristics of the factor supply and output markets.

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