dorsal/arxiv
View SchemaPareto's Law of Income Distribution: Evidence for Germany, the United Kingdom, and the United States
| Authors | F. Clementi, M. Gallegati |
|---|---|
| Categories | |
| ArXiv ID | physics/0504217 |
| URL | https://arxiv.org/abs/physics/0504217 |
| Journal | Chatterjee, A., Yarlagadda, S., and Chakrabarti B. K. (2005). Econophysics of Wealth Distributions. Milan: Springer-Verlag Italia. (pp. 3-14) |
Abstract
We analyze three sets of income data: the US Panel Study of Income Dynamics PSID), the British Household Panel Survey (BHPS), and the German Socio-Economic Panel (GSOEP). It is shown that the empirical income distribution is consistent with a two-parameter lognormal function for the low-middle income group (97%-99% of the population), and with a Pareto or power law function for the high income group (1%-3% of the population). This mixture of two qualitatively different analytical distributions seems stable over the years covered by our data sets, although their parameters significantly change in time. It is also found that the probability density of income growth rates almost has the form of an exponential function.
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"abstract": "We analyze three sets of income data: the US Panel Study of Income Dynamics\nPSID), the British Household Panel Survey (BHPS), and the German Socio-Economic\nPanel (GSOEP). It is shown that the empirical income distribution is consistent\nwith a two-parameter lognormal function for the low-middle income group\n(97%-99% of the population), and with a Pareto or power law function for the\nhigh income group (1%-3% of the population). This mixture of two qualitatively\ndifferent analytical distributions seems stable over the years covered by our\ndata sets, although their parameters significantly change in time. It is also\nfound that the probability density of income growth rates almost has the form\nof an exponential function.",
"arxiv_id": "physics/0504217",
"authors": [
"F. Clementi",
"M. Gallegati"
],
"categories": [
"physics.soc-ph",
"q-fin.GN"
],
"journal_ref": "Chatterjee, A., Yarlagadda, S., and Chakrabarti B. K. (2005).\n Econophysics of Wealth Distributions. Milan: Springer-Verlag Italia. (pp.\n 3-14)",
"title": "Pareto\u0027s Law of Income Distribution: Evidence for Germany, the United Kingdom, and the United States",
"url": "https://arxiv.org/abs/physics/0504217"
},
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