IDEAS home Printed from https://ideas.repec.org/p/arx/papers/physics-0607293.html

k-Generalized Statistics in Personal Income Distribution

Author

Listed:
  • F. Clementi
  • M. Gallegati
  • G. Kaniadakis

Abstract

Starting from the generalized exponential function $\exp_{\kappa}(x)=(\sqrt{1+\kappa^{2}x^{2}}+\kappa x)^{1/\kappa}$, with $\exp_{0}(x)=\exp(x)$, proposed in Ref. [G. Kaniadakis, Physica A \textbf{296}, 405 (2001)], the survival function $P_{>}(x)=\exp_{\kappa}(-\beta x^{\alpha})$, where $x\in\mathbf{R}^{+}$, $\alpha,\beta>0$, and $\kappa\in[0,1)$, is considered in order to analyze the data on personal income distribution for Germany, Italy, and the United Kingdom. The above defined distribution is a continuous one-parameter deformation of the stretched exponential function $P_{>}^{0}(x)=\exp(-\beta x^{\alpha})$\textemdash to which reduces as $\kappa$ approaches zero\textemdash behaving in very different way in the $x\to0$ and $x\to\infty$ regions. Its bulk is very close to the stretched exponential one, whereas its tail decays following the power-law $P_{>}(x)\sim(2\beta\kappa)^{-1/\kappa}x^{-\alpha/\kappa}$. This makes the $\kappa$-generalized function particularly suitable to describe simultaneously the income distribution among both the richest part and the vast majority of the population, generally fitting different curves. An excellent agreement is found between our theoretical model and the observational data on personal income over their entire range.

Suggested Citation

  • F. Clementi & M. Gallegati & G. Kaniadakis, 2006. "k-Generalized Statistics in Personal Income Distribution," Papers physics/0607293, arXiv.org, revised Feb 2007.
  • Handle: RePEc:arx:papers:physics/0607293
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/physics/0607293
    File Function: Latest version
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Soares, Abner D. & Moura Jr., Newton J. & Ribeiro, Marcelo B., 2016. "Tsallis statistics in the income distribution of Brazil," Chaos, Solitons & Fractals, Elsevier, vol. 88(C), pages 158-171.
    2. Costas Efthimiou & Adam Wearne, 2016. "Household Income Distribution in the USA," Papers 1602.06234, arXiv.org.
    3. Néda, Zoltán & Gere, István & Biró, Tamás S. & Tóth, Géza & Derzsy, Noemi, 2020. "Scaling in income inequalities and its dynamical origin," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 549(C).
    4. Tapiero, Oren J., 2013. "A maximum (non-extensive) entropy approach to equity options bid–ask spread," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(14), pages 3051-3060.
    5. Masato Okamoto, 2014. "A flexible descriptive model for the size distribution of incomes," Economics Bulletin, AccessEcon, vol. 34(3), pages 1600-1610.
    6. Fabio CLEMENTI & Mauro GALLEGATI, 2017. "NEW ECONOMIC WINDOWS ON INCOME AND WEALTH: THE k-GENERALIZED FAMILY OF DISTRIBUTIONS," Journal of Social and Economic Statistics, Bucharest University of Economic Studies, vol. 6(1), pages 1-15, JULY.
    7. Elvis Oltean, 2016. "Modelling income, wealth, and expenditure data by use of Econophysics," Papers 1603.08383, arXiv.org.
    8. José María Sarabia & Vanesa Jordá & Lorena Remuzgo, 2017. "The Theil Indices in Parametric Families of Income Distributions—A Short Review," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 867-880, December.
    9. Chami Figueira, F. & Moura, N.J. & Ribeiro, M.B., 2011. "The Gompertz–Pareto income distribution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(4), pages 689-698.
    10. Sarabia, José María & Jordá, Vanesa, 2014. "Explicit expressions of the Pietra index for the generalized function for the size distribution of income," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 416(C), pages 582-595.
    11. Bourguignon, Marcelo & Saulo, Helton & Fernandez, Rodrigo Nobre, 2016. "A new Pareto-type distribution with applications in reliability and income data," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 457(C), pages 166-175.
    12. F. Clementi & M. Gallegati & G. Kaniadakis, 2012. "A generalized statistical model for the size distribution of wealth," Papers 1209.4787, arXiv.org, revised Dec 2012.
    13. Masato Okamoto, 2013. "Erratum to “Evaluation of the goodness of fit of new statistical size distributions with consideration of accurate income inequality estimation”," Economics Bulletin, AccessEcon, vol. 33(3), pages 2443-2444.
    14. Anwar Shaikh, Amr Ragab, 2007. "WP 2007-3 An International Comparison of the Incomes of the Vast Majority," SCEPA working paper series. 2007-3, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    15. Victor M. Yakovenko & J. Barkley Rosser, 2009. "Colloquium: Statistical mechanics of money, wealth, and income," Papers 0905.1518, arXiv.org, revised Dec 2009.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:physics/0607293. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.