An analytic treatment of the Gibbs-Pareto behavior in wealth distribution

Arnab Das and Sudhakar Yarlagadda

Papers from arXiv.org

Abstract: We develop a general framework, based on Boltzmann transport theory, to analyze the distribution of wealth in societies. Within this framework we derive the distribution function of wealth by using a two-party trading model for the poor people while for the rich people a new model is proposed where interaction with wealthy entities (huge reservoir) is relevant. At equilibrium, the interaction with wealthy entities gives a power-law (Pareto-like) behavior in the wealth distribution while the two-party interaction gives a Boltzmann-Gibbs distribution.

Date: 2004-09, Revised 2005-03
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Citations: View citations in EconPapers (5)

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