The personal income distribution (PID) above the Pareto threshold is studied and modeled. A microeconomic model is proposed to simulate the PID and its evolution below and above the Pareto income threshold. The model balances processes of income production and dissipation for any person above 15 years of age. The model…
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48 results for “income prediction”
The average and median income dependence on work experience and time is analyzed and modeled for the USA. The original data set providing the mean and median income estimates in 10 year long intervals spans a long time period of almost 35 years ? from 1967 to 2003. A microeconomic model linking personal income, populat…
Herein, we applied statistical physics to study incomes of three (low-, medium- and high-income) society classes instead of the two (low- and medium-income)classes studied so far. In the frame of the threshold nonlinear Langevin dynamics and its threshold Fokker-Planck counterpart, we derived a unified formula for desc…
A microeconomic model is developed, which accurately predicts the shape of personal income distribution (PID) in the United States and the evolution of the shape over time. The underlying concept is borrowed from geo-mechanics and thus can be considered as mechanics of income distribution. The model allows the resoluti…
Modeling the evolution of Gini coefficient for personal incomes in the USA between 1947 and 2005q-fin.GN
The evolution of Gini coefficient for personal incomes in the USA between 1947 and 2005 is analyzed and modeled. There are several versions of personal income distribution (PID) provided by the US Census Bureau (US CB) for this period with various levels of resolution. Effectively, these PIDs result in different Gini c…
Paper uses Super-App data to improve income estimation models.
problem Improving accuracy of income estimation models.
method TreeSHAP method for Stochastic Gradient Boosting Interpretation.
result Alternative data from Super-Apps capture more information than traditional financial data.
LHIEM model predicts health, income, and employment over years.
problem Lack of path dependency in health policy simulations.
method Discrete-time microsimulation with Markov chain modules.
result Validates health care financing proposal through detailed modeling.
The prominent inequality of wealth and income is a huge concern especially in the United States. The likelihood of diminishing poverty is one valid reason to reduce the world's surging level of economic inequality. The principle of universal moral equality ensures sustainable development and improve the economic stabil…
Black women and white men have the highest income disparity in the U.S.
problem Income inequality between black women and white men in the USA
method Dynamic microeconomic model, analyzing black and white population income since 1930
result Black females and white males are poles of overall income inequality
We provide an analytically treatable model that describes in a unified manner income distribution for all income categories. The approach is based on a master equation with growth and reset terms. The model assumptions on the growth and reset rates are tested on an exhaustive database with incomes on individual level s…
One shirt size cannot fit everybody, while we cannot make a unique shirt that fits perfectly for everyone because of resource limitation. This analogy is true for the policy making. Policy makers cannot establish a single policy to solve all problems for all regions because each region has its own unique issue. In the …
With a new deprivation (or poverty) function, in this paper, we theoretically study the changes in poverty with respect to the `global' mean and variance of the income distribution using Indian survey data. We show that when the income obeys a log-normal distribution, a rising mean income generally indicates a reductio…
We analyze and develop a quantitative model describing the evolution of personal income distribution, PID, for males and females in the U.S. between 1930 and 2014. The overall microeconomic model, which we introduced ten years ago, accurately predicts the change in mean income as a function of age as well as the depend…
App enhances midwives' skills in low-income countries.
problem Low-income countries have high maternal and child mortality rates.
method Deep learning models predict midwives' interest in learning materials.
result Deep learning models accurately predict midwives' interest in learning materials.
Paper examines how income support affects retirement decisions for low-income individuals.
problem Retirement decisions of low-income individuals affected by income disaster.
method Modeling consumption/savings, investment, and retirement choices with income support.
result Optimal retirement decision depends on the level of income support provided.
The evolution of personal income distribution (PID) in four countries: Canada, New Zealand, the UK, and the USA follows a unique trajectory. We have revealed precise match in the shape of two age-dependent features of the PID: mean income and the portion of people with the highest incomes (2 to 5% of the working age po…
Exchanges in complex networks: income and wealth distributionscond-mat.stat-mech
We investigate the wealth evolution in a system of agents that exchange wealth through a disordered network in presence of an additive stochastic Gaussian noise. We show that the resulting wealth distribution is shaped by the degree distribution of the underlying network and in particular we verify that scale free netw…
This study considers a model of the income distribution of agents whose pairwise interaction is asymmetric and price-invariant. Asymmetric transactions are typical for chain-trading groups who arrange their business such that commodities move from senior to junior partners and money moves in the opposite direction. The…
This Chapter is written for the Festschrift celebrating the 70th birthday of the distinguished economist Duncan Foley from the New School for Social Research in New York. This Chapter reviews applications of statistical physics methods, such as the principle of entropy maximization, to the probability distributions of …
Kernel and linear regression have been recently explored in the prediction of graph signals as the output, given arbitrary input signals that are agnostic to the graph. In many real-world problems, the graph expands over time as new nodes get introduced. Keeping this premise in mind, we propose a method to recursively …
We empirically investigate distributions of individual consumption expenditure f or four commodity categories conditional on fixed income levels. The data stems from the Family Expenditure Survey carried out annually in the United Kingdom. W e use graphical techniques to test for normality and lognormality of these dis…
Study evaluates how much knowledge LLMs have by comparing their prediction accuracy to flexible models.
problem Evaluating the predictive power of LLMs without access to their training data.
method Equivalent sample size measure, comparing LLM's prediction error to flexible models trained on varying amounts of domain-specific data.
result LLMs encode varying amounts of predictive information across different economic variables.
The electronic calendar is a valuable resource nowadays for managing our daily life appointments or schedules, also known as events, ranging from professional to highly personal. Researchers have studied various types of calendar events to predict smartphone user behavior for incoming mobile communications. However, th…
The aim of this work is to establish the personal income distribution from the elementary constituents of a free market; products of a representative good and agents forming the economic network. The economy is treated as a self-organized system. Based on the idea that the dynamics of an economy is governed by slow mod…
In a recent work (Chattopadhyay, A. K. et al, Europhys. Lett. {\bf 91}, 58003, 2010) based on food consumption statistics, we showed how a stochastic agent based model could represent the time variation of the income distribution statistics in a developing economy, thereby defining an alternative \enquote{poverty index…
This paper explores several types of income which have not been explored so far by authors who tackled income and wealth distribution using Statistical Physics. The main types of income we plan to analyze are income before redistribution (or gross income), income of retired people (or pensions), and income of active pe…
Effects of income redistribution on the evolution of cooperation in spatial public goods gamesphysics.soc-ph
Income redistribution is the transfer of income from some individuals to others directly or indirectly by means of social mechanisms, such as taxation, public services and so on. Employing a spatial public goods game, we study the influence of income redistribution on the evolution of cooperation. Two kinds of evolutio…
We found a unified formula for description of the household incomes of all society classes, for instance, for the European Union in years 2005-2010. The formula is more general than well known that of Yakovenko et al. because, it satisfactorily describes not only the household incomes of low- and medium-income society …
Analyzes how many people can receive stable income in a pooled annuity fund.
problem Quantifying the trade-off between income stability and the number of members in a pooled annuity fund.
method Investment returns held constant, systematic longevity risk omitted. Derived an analytical expression for income stability.
result The number of fund members who receive stable income is independent of the mortality model.
Capital usually leads to income, and income is more accurately and easily measured. Thus we summarize income distributions in USA, Germany, etc.
This paper presents a dynamic model to study the impact on the economic outcomes in different societies during the Malthusian Era of individualism (time spent working alone) and collectivism (complementary time spent working with others). The model is driven by opposing forces: a greater degree of collectivism provides…
The scaling of income inequality in citiesphysics.soc-ph
Developing a scientific understanding of cities in a fast urbanizing world is essential for planning sustainable urban systems. Recently, it was shown that income and wealth creation follow increasing returns, scaling superlinearly with city size. We study scaling of per capita incomes for separate census defined incom…
Scaling of Urban Income Inequality in the United Statesphysics.soc-ph
Study shows income inequality increases with city size, affecting only the wealthiest deciles.
problem Understanding income inequality in urban areas.
method Urban scaling analysis of total income scaling in population percentiles.
result Income in the poorest decile does not increase with city size, while the wealthiest deciles show superlinear scaling.
We found a unified formula for description of the household incomes of all society classes, for instance, of those of the European Union in year 2007. This formula is a stationary solution of the threshold Fokker-Planck equation (derived from the threshold nonlinear Langevin one). The formula is more general than the w…
Income and wealth distribution affect stability of a society to a large extent and high inequality affects it negatively. Moreover, in the case of developed countries, recently has been proven that inequality is closely related to all negative phenomena affecting society. So far, Econophysics papers tried to analyse in…
Model shows significant income inequality emerges from equal opportunities in a simple economy.
problem Income inequality in a simple foraging economy.
method Minimal, endogenous model of a simple foraging economy.
result Stochastic income distributions from the model match empirical data.
Universal Structure of the Personal Income Distributioncond-mat.stat-mech
We investigate the Japanese personal income distribution in the high income range over the 112 years 1887-1998, and that in the middle income range over the 44 years 1955-98. It is observed that the distribution pattern of the lognormal with power law tail is the universal structure. However the indexes specifying the …
Anytime-valid confirmation of label-shift corrections
problem Small-batch scientific deployments with scarce labeled outcomes
method Conditional e-value and martingale-based rule
result Nonnegative martingale and anytime-valid confirmation rule
We prove that the refined approach -- our extension of the Yakovenko et al. formalism -- is universal in the sense that it describes well both household incomes in the European Union and the individual incomes in the United States for social classes of any income. This formalism allowed the study of the impact of the r…
We investigate the Brazilian personal income distribution using data from National Household Sample Survey (PNAD), an annual research available by the Brazilian Institute of Geography and Statistics (IBGE). It provides general characteristics of the country's population. Using PNAD data background we also confirm the e…
Pareto's Law of Income Distribution: Evidence for Germany, the United Kingdom, and the United Statesphysics.soc-ph
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 …
In this article we present an alternative model for the distribution of household incomes in the United States. We provide arguments from two differing perspectives which both yield the proposed income distribution curve, and then fit this curve to empirical data on household income distribution obtained from the Unite…
A New Approach to Personal Income Distributioncond-mat.stat-mech
The results of R^2 dynamical random surface model (2-dimensional quantum gravity with a term) are applied to explain the personal income distribution. A scale invariance exists if there is not the term in the action. The R^2 term provides a typical scale and breaks the scale invariance explicitly in the low…
We present a stochastic agent-based model for the distribution of personal incomes in a developing economy. We start with the assumption that incomes are determined both by individual labour and by stochastic effects of trading and investment. The income from personal effort alone is distributed about a mean, while the…
The mean-field approximation model of company's income growthcond-mat.stat-mech
We introduce a mean-field type approximation for description of company's income statistics. Utilizing huge company data we show that a discrete version of Langevin equation with additive and multiplicative noises can appropriately describe the time evolution of a company's income fluctuation in statistical sense. The …
Optimal income crossover found using particle swarm optimization.
problem Determining the crossover point between two income distributions.
method Particle swarm optimization for finding crossover income, temperature, and Pareto index.
result Optimization method finds boundaries of two income distributions.
Growth and Fluctuations of Personal Incomecond-mat.dis-nn
Pareto's law states that the distribution of personal income obeys a power-law in the high-income range, and has been supported by international observations. Researchers have proposed models over a century since its discovery. However, the dynamical nature of personal income has been little studied hitherto, mostly du…
By using methods of statistical physics, we focus on the quantitative analysis of the economic income data descending from different databases. To explain our approach, we introduce the necessary theoretical background, the extended Yakovenko et al. (EY) model. This model gives an analytical description of the annual h…