Enriching the Theory of Factor Pricing and Income Distribution in Islamic Perspective

Authors

  • AtihRohaeti Dariah Bandung Islamic University, Jl. Tamansari No. 1 Bandung, Indonesia
  • Yuhka Sundaya Bandung Islamic University, Jl. Tamansari No. 1 Bandung, Indonesia
  • Zaini Abdul Malik Bandung Islamic University. Jl. Ranggagading No. 8, Bandung, Indonesia

DOI:

https://doi.org/10.24297/jssr.v5i3.3418

Keywords:

Factor Pricing, Income Distribution, Mudharabah, Profit Share

Abstract

The paper aims to elaborate  the theory of factor pricing and income distribution in Islamic perspective. We place Sadeqs thought as the benchmark and expand it. Using calculus differential, we construct factor pricing and income distribution under mudharabah scheme, which can describe the behavior of producer (mudhaarib) in making decision on business operation appropriately. The paper can prove mathematically that when Islamic principles are internalized, income distribution becomes more equal. This is expressed in parameters s, 1-s, and 1/1-s, as a share of profit goes to capital owner (shahibulmaal), entrepreneur (mudhaarib) and worker, respectively. The paper also proposes that wage level will be determined not only by perception or the mind set of capital owners and workers on the value of their assets, but also the standing moral of entrepreneurs and capital owners.

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Author Biographies

AtihRohaeti Dariah, Bandung Islamic University, Jl. Tamansari No. 1 Bandung, Indonesia

Economics Department,

Yuhka Sundaya, Bandung Islamic University, Jl. Tamansari No. 1 Bandung, Indonesia

Economics Department,

Zaini Abdul Malik, Bandung Islamic University. Jl. Ranggagading No. 8, Bandung, Indonesia

Banking and Finance Department,

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Published

2014-11-19

How to Cite

Dariah, A., Sundaya, Y., & Malik, Z. A. (2014). Enriching the Theory of Factor Pricing and Income Distribution in Islamic Perspective. JOURNAL OF SOCIAL SCIENCE RESEARCH, 5(3), 872–881. https://doi.org/10.24297/jssr.v5i3.3418

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Section

Articles