Ab initio analysis of all income society classes in the European Union

TL;DR

This paper derives a unified formula based on a threshold Fokker-Planck equation to describe household incomes across all societal classes in the EU, including high-income groups, providing a comprehensive income distribution model.

Contribution

It introduces a novel, unified analytical formula for household income distribution applicable to all societal classes, extending previous models to high-income groups.

Findings

The formula accurately describes income distributions across all classes.

It generalizes previous models by including high-income class data.

The approach is based on a stationary solution of a threshold Fokker-Planck equation.

Abstract

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 well known that of Yakovenko et al. because it satisfactorily describes not only household incomes of low- and medium-income society classes but also the household incomes of the high-income society class.