Study of Households' Income in Poland by Using the Statistical Physics Approach

Abstract

At the end of 19th century Vilfredo Pareto, as the first tried by using power-laws to describe wealth and income distributions in society. We applied early works of Pareto as well as Gibrat (i.e. laws of Pareto and rules of proportionate growth, respectively). Furthermore, we used recent and advanced models: the Generalised Lotka-Volterra model and collision models. By using empirical data for annual income of Polish households, e.g. for years 2003 and 2006, the comparison with these theoretical models was successfully made. The surprisingly good agreements with Pareto distribution were obtained, where Pareto exponents near the cubic law were found for middle class. For the low class very good agreement with prediction of the cumulative log-normal distribution was gained. Hence, it was possible to establish the border between low and middle society levels. The same was possible for the border between high and middle classes as the ranking for the former follows (to some extent) the Zipf law.

Modelling of income distribution in the European Union with the Fokker–Planck equation

“…Pareto's economic discoveries initiated attempts of analytical descriptions of incomes of the societies and inspired an avalanche of related research works [2,3,[5][6][7][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24]. Among them, particularly significant are those of the economist Robert Gibrat [7,10,11].…”

Preliminary Comparison of Households' Income in Poland with European Union and United States Ones by Using the Statistical Physics Methods

“…An important advantage of this model is the ability to characterise the empirical distribution using a single function. It also offers valuable theoretical approach on the microscopic level, where households income is determined by the revenue gained so far, the social security benefits (in general, redistribution of revenues in society) and the general state of economy [3,4,10].…”

Modern Rheology on a Stock Market: Fractional Dynamics of Indices

“…Thus, we have to deal with three groups of cooperative investors which is a reminiscence of an income distribution in society, where (roughly speaking) three essentially different prosperity groups were discovered [39][40][41][42]. Nevertheless, it is still a challenge to choose arrangements, which properly map microscopic cooperative structures of stock markets.…”