Income distribution: Boltzmann analysis and its extension

He Yuqing

Physica A: Statistical Mechanics and its Applications, 2007, vol. 377, issue 1, 230-240

Abstract: The paper aims at describing income distribution in moderate income regions. Starting with dividing income behaviors into the two parts: random and deterministic, and by introducing “instantaneous model” for theoretical derivations and “cumulative model” for positive tests, this paper applies the equilibrium approach of statistical mechanics in the study of nonconserved individual income course. The random income follows a stationary distribution similar to the Maxwell–Boltzmann distribution in the instantaneous model. Combining this result with marginal analysis, the probability distribution of individual income process that is composed of the random and deterministic income courses approximately obeys a distribution law mixing exponential function with a logarithmic prefactor. Using the census or income survey data of USA, UK, Japan, and New Zealand, the distribution law has been tested. The results show that it agrees very well with most of the empirical data. The discussion suggests that there might be essentially different income processes to happen in moderate and high income regions.

Keywords: Deterministic; Random; Income; Distribution (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:377:y:2007:i:1:p:230-240

DOI: 10.1016/j.physa.2006.11.009

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