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Exploiting the flexibility of a family of models for taxation and redistribution

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  • M. Bertotti
  • G. Modanese

Abstract

We discuss a family of models expressed by nonlinear differential equation systems describing closed market societies in the presence of taxation and redistribution. We focus in particular on three example models obtained in correspondence to different parameter choices. We analyse the influence of the various choices on the long time shape of the income distribution. Several simulations suggest that behavioral heterogeneity among the individuals plays a definite role in the formation of fat tails of the asymptotic stationary distributions. This is in agreement with results found with different approaches and techniques. We also show that an excellent fit for the computational outputs of our models is provided by the κ-generalized distribution introduced by Kaniadakis in [Physica A 296, 405 (2001)]. Copyright EDP Sciences, SIF, Springer-Verlag Berlin Heidelberg 2012

Suggested Citation

  • M. Bertotti & G. Modanese, 2012. "Exploiting the flexibility of a family of models for taxation and redistribution," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 85(8), pages 1-10, August.
    • Handle: RePEc:spr:eurphb:v:85:y:2012:i:8:p:1-10:10.1140/epjb/e2012-30239-3
    DOI: 10.1140/epjb/e2012-30239-3
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    Citations

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    Cited by:

    1. M. L. Bertotti & G. Modanese, 2016. "Mathematical models describing the effects of different tax evasion behaviors," Papers 1701.02662, arXiv.org.
    2. Maria Letizia Bertotti & Giovanni Modanese, 2014. "Microscopic Models for Welfare Measures Addressing a Reduction of Economic Inequality," Papers 1407.3749, arXiv.org, revised Sep 2014.
    3. Maria Letizia Bertotti & Amit K Chattopadhyay & Giovanni Modanese, 2017. "Economic inequality and mobility for stochastic models with multiplicative noise," Papers 1702.08391, arXiv.org.
    4. Maria Letizia Bertotti & Giovanni Modanese, 2014. "Micro to macro models for income distribution in the absence and in the presence of tax evasion," Papers 1403.0015, arXiv.org.
    5. Maria Letizia Bertotti & Giovanni Modanese, 2015. "Economic inequality and mobility in kinetic models for social sciences," Papers 1504.03232, arXiv.org.
    6. Bertotti, M.L. & Chattopadhyay, A.K. & Modanese, G., 2017. "Stochastic effects in a discretized kinetic model of economic exchange," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 471(C), pages 724-732.
    7. Aydiner, Ekrem & Cherstvy, Andrey G. & Metzler, Ralf, 2018. "Wealth distribution, Pareto law, and stretched exponential decay of money: Computer simulations analysis of agent-based models," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 490(C), pages 278-288.
    8. M. L. Bertotti & G. Modanese, 2018. "Mathematical models describing the effects of different tax evasion behaviors," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 13(2), pages 351-363, July.

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    Keywords

    Statistical and Nonlinear Physics;

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