Exploiting the flexibility of a family of models for taxation and redistribution

Maria Letizia Bertotti and Giovanni Modanese

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Abstract: We discuss a family of models expressed by nonlinear differential equation systems describing closed market societies in the presence of taxation and redistribution. We focus in particular on three example models obtained in correspondence to different parameter choices. We analyse the influence of the various choices on the long time shape of the income distribution. Several simulations suggest that behavioral heterogeneity among the individuals plays a definite role in the formation of fat tails of the asymptotic stationary distributions. This is in agreement with results found with different approaches and techniques. We also show that an excellent fit for the computational outputs of our models is provided by the k-generalized distribution introduced by G. Kaniadakis (Physica A 296 (2001) 405-425).

Date: 2012-07, Revised 2014-03
New Economics Papers: this item is included in nep-cmp
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Published in Eur. Phys. J. B (2012) 85: 261

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