Although specific individuals may receive income from all these sources, that is not a matter of concern for the functional approach. The theory attempts to explain the income of a factor of production by the contribution that this factor makes to production assuming that supply and demand curves determine the unit prices of each productive factor. When these unit prices are multiplied by quantities employed on the assumption of efficient factor utilization, then a measure of the total payment to each factor is obtained. For example, the supply of and demand for labour are assumed to determine its market wage. When this wage is multiplied by the total level of employment, a measure of total wage payments, also sometimes called the total wage bill, is obtained. It is a neat and logical theory in that each and every factor gets paid only in accordance with what it contributes to national output, no more and no less. This model of income distribution is at the core of the Lewis theory of modern-sector growth based on the reinvestment of rising capitalist profits . Unfortunately, the relevance of the functional theory is greatly diminished by its failure to take into account the important role and influence of nonmarket forces such as power in determining these factor prices .

In general, mobile grow system new approaches are emerging to make the results of income inequality analysis more meaningful. Park et al. for example, have proposed a new framework for measuring income inequality based on the unequally distributed incomes that are obtained by removing the equally distributed parts from incomes. They then derive the normalized norm indexes from the cumulative distribution function and the un-scaled Lorenz curve of the UD incomes.Using the example of income distributions and the Luxembourg Income Study datasets, Park et al. show that, the normalized norm indexes evaluated income inequality appropriately and solved the negative income problem.Else where in the Mediterranean countries, Benedetti et al.  provide point and variance estimates of two widely used income-poverty indicators, belonging to the class of the Foster-Greer-Thorbecke , and two widely used income in equality indicators. Their estimation results revealed that national poverty indicators hide a high heterogeneity of poverty across regions within each country. They adopted the Jackknife replication method because of its convenient properties and they found that the uncertainty measure was influenced by the reduced number of sampling units in each region.

It should be noted here that, the FGT class is preferred by some researchers for having certain ad vantages, including its simple structure based on powers of normalized shortfalls, which facilitate communication with policymakers . Its axiomatic properties are also viewed as sound and include the helpful properties of additive decomposability and subgroup consistency, which allow poverty to be evaluated across population subgroups in a coherent way . We constructed a conceptual framework which shows that income in equality and poverty in mountain areas, is a result of an array of both internal and external factors. These factors vary depending on the nature and source of inequality, such as,mobile vertical rack inequality in earnings of the working population, inequality in earnings of the total population, as well as, household income inequality before and after redistribution, just to mention a few.

Our framework shows that the nature and level of income inequality is determined by four major characteristics or forces namely; the household personal characteristics ; farming characteristics ;economic characteristics ; and existing transforming structures and processes . Macro-economic characteristics impact income inequality through economic growth as well as, globalisation and technological change . Just as important,age and dependency ratios can strongly impact labour supply and therefore earnings from labour. Demographic factors can impact income redistribution which in turn can affect demographic characteristics: for example, low income distribution can lead to the formation of extended families as an alternative protection to poverty risks . In the mountain areas context, we view income inequality as socially undesirable for three major reasons.