Power law tails in the Italian personal income distribution

By Fabio Clementi, Mauro Gallegati. 2004

163 citations recorded by the source corpus.

We investigate the shape of the Italian personal income distribution using microdata from the Survey on Household Income and Wealth, made publicly available by the Bank of Italy for the years 1977–2002. We find that the upper tail of the distribution is consistent with a Pareto-power law type distribution, while the rest follows a two-parameter lognormal distribution. The results of our analysis show a shift of the distribution and a change of the indexes specifying it over time. As regards the first issue, we test the hypothesis that the evolution of both gross domestic product and personal income is governed by similar mechanisms, pointing to the existence of correlation between these quantities. The fluctuations of the shape of income distribution are instead quantified by establishing some links with the business cycle phases experienced by the Italian economy over the years covered by our dataset.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/9a01df5eb3607b64b7a3d1dae4509ad3f65653e8

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Citations in the corpus

The Effect of Consumption and Production Structure on Growth and Distribution: A Micro to Macro Model (2010, unknown): “21See for instance Fiaschi and Marsili (2006), Clementi and Gallegati (2005) and Klass, Biham, Levy, Malcai, and Solomon (2006).”
Colloquium: Statistical mechanics of money, wealth, and income (2009, background): “…Souma, 2001, 2002; Souma and Nirei, 2005), Germany (Clementi and Gallegati, 2005a; Clementi, Gallegati, and Kaniadakis, 2007), the UK (Clementi and Gallegati, 2005a; Clementi, Gallegati, and Kaniadakis, 2007; Ferrero, 2004, 2005; Richmond, Hutzler, Coelho, and Repetowicz, 2006),…”
Pareto's Law of Income Distribution: Evidence for Germany, the United Kingdom, and the United States (2005, methodology): “Preprint submitted to Elsevier Science 10 January 2022”
Skewed Wealth Distributions: Theory and Empirics (2018, unknown): “Thick tails are also documented, for example, by Clementi and Gallegati (2005) for Italy from 1977 to 2002, Dagsvik and Vatne (1999) for Norway in 1998, and Vermeulen (2018) for several European countries; see his table 8.”