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Quantifying invariant features of within-group inequality in consumption across groups

Anindya S. Chakrabarti (), Arnab Chatterjee (), Tushar Nandi (), Asim Ghosh () and Anirban Chakraborti ()
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Anindya S. Chakrabarti: Indian Institute of Management
Arnab Chatterjee: Saha Institute of Nuclear Physics
Tushar Nandi: CTRPFP, Centre for Studies in Social Sciences
Asim Ghosh: Aalto University School of Science
Anirban Chakraborti: Jawaharlal Nehru University

Journal of Economic Interaction and Coordination, 2018, vol. 13, issue 3, 469-490

Abstract: Abstract We study unit-level expenditure on consumption across multiple countries and multiple years, in order to extract invariant features of consumption distribution. We show that the bulk of it is lognormally distributed, followed by a power law tail at the limit. The distributions coincide with each other under normalization by mean expenditure and log scaling even though the data is sampled across multiple dimension including, e.g. time, social structure and locations. This phenomenon indicates that the dispersions in consumption expenditure across various social and economic groups are significantly similar subject to suitable scaling and normalization. Further, the results provide a measurement of the core distributional features. Other descriptive factors including those of sociological, demographic and political nature, add further layers of variation on the this core distribution. We present a stochastic multiplicative model to quantitatively characterize the invariance and the distributional features.

Keywords: Inequality; Invariance; Consumption distribution; Power law; Lognormal distribution (search for similar items in EconPapers)
JEL-codes: D63 D30 I32 E21 (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:spr:jeicoo:v:13:y:2018:i:3:d:10.1007_s11403-017-0189-0