L-stable model for the distribution of income

Benoit B. Mandelbrot
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Benoit B. Mandelbrot: Yale University, Mathematics Department

Chapter E10 in Fractals and Scaling in Finance, 1997, pp 271-306 from Springer

Abstract: Abstract This paper introduces a new model for the distribution of income, and hopes to draw attention to the great potential of the “L-stable” family of nonGaussian probability distributions. This new tool may be as important as the specific application to be discussed. In other words, the same approach translates immediately to analogous quantities for which it may be more reasonable, or give a better fit. One might even paraphrase Einstein’s cagey comment about Brownian motion: it is possible that the properties studied in that paper are identical to those of income; however, the information available regarding incomes is so lacking in precision that one cannot really form a judgement on the matter.

Keywords: Income Distribution; Personal Income; Brownian Particle; Tail Probability; Gaussian Case (search for similar items in EconPapers)
Date: 1997
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-1-4757-2763-0_10

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DOI: 10.1007/978-1-4757-2763-0_10

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