The particle system model of income and wealth more likely to imply an analogue of thermodynamics in social science
AbstractThe Inequality Process (IP) and the Saved Wealth Model (SW) are particle system models of income distribution. The IP’s social science meta-theory requires its stationary distribution to fit the distribution of labor income conditioned on education. The Saved Wealth Model (SW) is an ad hoc modification of the particle system model of the Kinetic Theory of Gases (KTG). The KTG implies the laws of gas thermodynamics. The IP is a particle system similar to the SW and KTG, but less closely related to the KTG than the SW. This paper shows that the IP passes the key empirical test required of it by its social science meta-theory better than the SW. The IP’s advantage increases as the U.S. labor force becomes more educated. The IP is the more likely of the two particle systems to underlie an analogue of gas thermodynamics in social science as the KTG underlies gas thermodynamics.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 28864.
Date of creation: 14 Feb 2011
Date of revision:
Inequality Process; Kinetic Theory of Gases; labor income distribution; particle system; Saved Wealth Model; social science analogue of thermodynamics;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
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