An statistical analysis of stratification and inequity in the income distribution

TL;DR

This paper analyzes the income distribution in the USA 2001, revealing a stratified structure described by Tsallis statistics, and shows that inequity cannot be reduced by increasing total income.

Contribution

It introduces a model using gas kinetics with distributed saving propensity to reproduce and interpret income stratification in empirical data.

Findings

Income distribution follows two Tsallis components with different q values.

The distribution is invariant to average income, indicating inequity cannot be reduced by income growth.

The model successfully reproduces empirical stratification patterns.

Abstract

The analysis of the USA 2001 income distribution shows that it can be described by at least two main components, which obey the generalized Tsallis statistics with different values of the q parameter. Theoretical calculations using the gas kinetics model with a distributed saving propensity factor and two ensembles reproduce the empirical data and provide further information on the structure of the distribution, which shows a clear stratification. This stratification is amenable to different interpretations, which are analyzed. The distribution function is invariant with the average individual income, which implies that the inequity of the distribution cannot be modified by increasing the total income.