English

k-Generalized Statistics in Personal Income Distribution

Physics and Society 2008-12-02 v2 General Finance

Abstract

Starting from the generalized exponential function expκ(x)=(1+κ2x2+κx)1/κ\exp_{\kappa}(x)=(\sqrt{1+\kappa^{2}x^{2}}+\kappa x)^{1/\kappa}, with exp0(x)=exp(x)\exp_{0}(x)=\exp(x), proposed in Ref. [G. Kaniadakis, Physica A \textbf{296}, 405 (2001)], the survival function P>(x)=expκ(βxα)P_{>}(x)=\exp_{\kappa}(-\beta x^{\alpha}), where xR+x\in\mathbf{R}^{+}, α,β>0\alpha,\beta>0, and κ[0,1)\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(βxα)P_{>}^{0}(x)=\exp(-\beta x^{\alpha})\textemdash to which reduces as κ\kappa approaches zero\textemdash behaving in very different way in the x0x\to0 and xx\to\infty regions. Its bulk is very close to the stretched exponential one, whereas its tail decays following the power-law P>(x)(2βκ)1/κxα/κP_{>}(x)\sim(2\beta\kappa)^{-1/\kappa}x^{-\alpha/\kappa}. This makes the κ\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.

Keywords

Cite

@article{arxiv.physics/0607293,
  title  = {k-Generalized Statistics in Personal Income Distribution},
  author = {F. Clementi and M. Gallegati and G. Kaniadakis},
  journal= {arXiv preprint arXiv:physics/0607293},
  year   = {2008}
}

Comments

Latex2e v1.6; 14 pages with 12 figures; for inclusion in the APFA5 Proceedings