Pareto's Law of Income Distribution: Evidence for Germany, the United Kingdom, and the United States
By Fabio Clementi, Mauro Gallegati. 2005
166 citations recorded by the source corpus.
We analyze three sets of income data: the US Panel Study of Income Dynamics PSID), the British Household Panel Survey (BHPS), and the German Socio-Economic Panel (GSOEP). It is shown that the empirical income distribution is consistent with a two-parameter lognormal function for the low-middle income group (97%-99% of the population), and with a Pareto or power law function for the high income group (1%-3% of the population). This mixture of two qualitatively different analytical distributions seems stable over the years covered by our data sets, although their parameters significantly change in time. It is also found that the probability density of income growth rates almost has the form of an exponential function.
Subfields: Economics and Econometrics, Sociology and Political Science
View Paper: https://www.semanticscholar.org/paper/4a4fa19b40fe3ad37a80fc7bcc096f6a26047d2b
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In Economics and Econometrics
Citations in the corpus
- Beyond Gaussian averages: redirecting international business and management research toward extreme events and power laws (2007, background): “…et al. (2007) Mandelbrot and Hudson (2004) Scheinkman and Woodford (1994) Lee et al. (1998) Poole et al. (2000) Diatlov (2005) Gunz et al. (2001) Clementi and Gallegati (2005) Stanley et al. (1996) Axtell (2001) To the extent that interdependence applies, researchers ignoring power law effects…”
- WEALTH INEQUALITY: A SURVEY (2015, unknown): “(1986) and applied to income distribution models by Victoria-Feser and Ronchetti (1994), Victoria-Feser (2000) and Cowell and Victoria-Feser (2008). More recent approaches are based on Robust Indirect Inference (Genton and Ronchetti 2003).”