TITLE

RATIONAL INCOME DECISIONS OF NEGROES AND EVERYBODY ELSE

AUTHOR(S)
Michelson, Stephan
PUB. DATE
October 1969
SOURCE
ILR Review;Oct69, Vol. 23 Issue 1, p15
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The article presents two views of rational behavior in choosing income strategies. The traditional approach, assumes a person chooses to maximize his expected income. However, economists investigating such choices often use data which do not take into consideration alternatives open to the person making the choice. These moves may be deliberate pathways to success or unfortunate indications of failure. But expected income from any strategy will not be the same as the mean income of people who have ended up with the chosen characteristics. Maximizing expected income is unlikely to be a good statistical proxy function in a risky world where people maximize the expected utility of income. An alternative function to maximize the probability of achieving above a specified income is presented. Probabilities of high income were estimated for Negroes showing the southern Negro generally has great incentive to move North, and all Negroes have great incentive to continue their education. This indicates more black schooling, migration, and, in the absence of reward for those accomplishments, greater frustration.
ACCESSION #
4468579

 

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