A family-network model for wealth distribution in societies

Ricardo Coelho, Zoltán Néda, José J. Ramasco and Maria Augusta Santos

Physica A: Statistical Mechanics and its Applications, 2005, vol. 353, issue C, 515-528

Abstract: A model based on first-degree family relations network is used to describe the wealth distribution in societies. The network structure is not a priori introduced in the model, it is generated in parallel with the wealth values through simple and realistic dynamical rules. The model has two main parameters, governing the wealth exchange in the network. Choosing their values realistically, leads to wealth distributions in good agreement with measured data. The cumulative wealth distribution function has an exponential behavior in the low and medium wealth limit, and shows the Pareto-like power-law tail for the upper 5% of the society. The obtained Pareto indexes are in good agreement with the measured ones. The generated family networks also converge to a statistically stable topology with a simple Poissonian degree distribution. On this family network many interesting correlations are studied, and the main factors leading to wealth diversification and the formation of the Pareto law are identified.

Keywords: Wealth distribution; Random Networks; Econophysics; Pareto's law (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S037843710500066X
Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:353:y:2005:i:c:p:515-528

DOI: 10.1016/j.physa.2005.01.037

Access Statistics for this article

Physica A: Statistical Mechanics and its Applications is currently edited by K. A. Dawson, J. O. Indekeu, H.E. Stanley and C. Tsallis

More articles in Physica A: Statistical Mechanics and its Applications from Elsevier
Bibliographic data for series maintained by Catherine Liu ().