Income distribution varies greatly in all economies because at any point in time, some households and individuals earn more while others earn relatively less which result to different income distribution. In fact, the “build-up” approach to the income is usually adopted where the income of individuals is explored first, followed by household income (Nolan, Salverda, and Smeeding 2). In this case, factors that influence the individual’s income such as workforce returns are traced through the income of the household which is influenced by wider aspects of social, demographic, and government policies. Therefore, the concept of estimating the income distribution in New Zealand is the main concern raised for investigation.
It is worth noting that when a particular company is interested in estimating the distribution of income in New Zealand’s North Island, there are various approaches that can be used. In essence, the most appropriate tactic is to consider the last published data and information on wealth distribution as well as study the most recent data which will offer an up-to-date picture of the distribution of wealth today (Johnson 1). In addition, the firm would also consider the income distribution at the household, individual, and national level. Through consideration of data from various sectors, the company will find the total income of the households which will be derived after totaling annual personal income for the adults (before tax) from all the sources that are received by the households and “equivalised” for the size of the households.
By and large, the aspect of estimating income distribution would require the firm to visit public sources of data which include income tax returns from the Inland Revenue Department, Quarterly Employment Surveys published by the New Zealand Income Survey, and household and individual statistics from the estimates of national income sector and censuses. In fact, those government sectors provide reliable estimates of income shares of various groups in the society which can be used for analysis to estimate the income distribution in New Zealand’s North Island.
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