A Generalized Statistical Model for the Size Distribution of Wealth
J. Stat. Mech. (2012) P12006
23 Pages Posted: 22 Sep 2012 Last revised: 6 Dec 2012
Date Written: September 21, 2012
In a recent paper in this journal [J. Stat. Mech. (2009) P02037] we proposed a new, physically motivated, distribution function for modeling individual incomes having its roots in the framework of the k-generalized statistical mechanics. The performance of the k-generalized distribution was checked against real data on personal income for the United States in 2003. In this paper we extend our previous model so as to be able to account for the distribution of wealth. Probabilistic functions and inequality measures of this generalized model for wealth distribution are obtained in closed form. In order to check the validity of the proposed model, we analyze the U.S. household wealth distributions from 1984 to 2009 and conclude an excellent agreement with the data that is superior to any other model already known in the literature.
Keywords: k-generalized statistics, wealth distribution, finite mixture models
JEL Classification: C46, D31
Suggested Citation: Suggested Citation