Inequality in Income Distributions: Does Culture Matter? an Analysis of Western Native American Tribes
Mushinski, David W., Pickering, Kathleen, Journal of Economic Issues
Social theorists have postulated a relationship between the cultural characteristics of a society and resource distributions in its community [Flanagan and Rayner 1988, 2,13; Leacock 1978, 227]. For example, more hierarchical societies might be expected to exhibit greater income inequality [Britan and Cohen 1980, 26]. Despite these observations, standard economic analyses have ignored the impact of cultural characteristics on income inequality in a society. This paper combines data from the United States Census with measures of North American tribal cultural characteristics developed by Joseph Jorgensen  to determine the impact of cultural factors on income inequality.
Standard analyses of inequality in income distributions have ignored the social organization and cultural contexts from which income distributions arise. Some economists have long recognized that analyses should interpret economic transactions in light of the social organization and cultural context in which they arose [Neale 1957; Colin and Losch 1994, 332; Stanfield 1986, 56-58]. Indeed, they argue that analyses of economic transactions should start with an evaluation of the cultural context in which economic transactions take place [e.g., Mayhew 1987; Jennings and Waller 1995]. David Hamilton  has argued that market interactions should be analyzed from a cultural perspective, as they are products of cultural relationships of which the market economy is one subset. These analyses make apparent that social organization and cultural factors affect economic outcomes.
Several cultural and social characteristics have been identified by anthropological studies and institutional economists as relevant to an analysis of economic interactions. Forms of economic integration and distribution, settlement patterns, kinship structure, patterns of inheritance, and political organization have all been associated with economic outcomes. Karl Polanyi [19441 identified three forms of economic integration that affect economic transactions: (1) reciprocal, (2) redistributive, and (3) exchange. "Reciprocity denotes movements between correlative points of symmetrical groupings; redistribution designates appropriational movements toward a center and out of it again; exchange refers here to vice-versa movements taking place as between 'hands' under a market system" [Polanyi 1957, 250]. The relative dominance of reciprocity, redistribution, and exchange was identified by Polanyi as being the key to drawing a contrast between societies with price-fixing markets and those without [Polanyi 1957, 250-270]. Greater sedentism has been associated with more complex and centralized economic organizations [Jorgensen 1980, 161,164]. Anthropologists have posited regular relationships among certain recurring economic and kinship phenomena [Driver 1956; Jorgensen 1980, 175]. Forms of inheritance and the methods by which inheritance are determined also relate to maintenance of and access to wealth [Saul 1992, 342-343; Schneider 1961, 4, 9-10]. Increasing political ranking has also been associated with differential access to power and resources [Fried 1978]. In general, growing inequality is anticipated as social and economic complexity and centralization increase [Bodley 1997, 305; Flanagan and Rayner 1988, 2-3; Robbins 1997, 160].
The data used in this analysis came from two sources. The economic and demographic variables came from the 1990 United States Decennial Census. The Decennial Census is one of the few detailed sources of information on Native American tribal areas [Snipp 1996, 17, 23-24].  The income data gathered by the Census include a variety of formal or regular sources of income such as wage, salary, and self-employment income. It does not include income obtained from non-regular sources like gifts, ceremonial exchanges, bartered goods and services, and other lump-sum receipts. Income obtained from informal sector activity is also likely not reported. …