All
 
|
 
 


Model of income distribution on the basis of a finite functional sequence and its application for inequality analysis
 
PIIS042473880012411-1-1
DOI10.31857/S042473880012411-1
Publication type Article
Status Published
Authors
Alexander E. Varshavsky 
Occupation: Head of laboratory
Affiliation: CEMI RAS
Address: Russian Federation, Moscow
Journal nameEkonomika i matematicheskie metody
EditionVolume 56 Issue 4
Pages20-31
Abstract

The paper develops the results presented in the author's previously published articles on the elaboration of a new model of income distribution described by a finite functional sequence. The model provides a good accuracy of approximation of the distribution of income for equal groups of the population that is confirmed by the results of empirical studies and is justified theoretically. The introduction of a new indicator of inequality that is correlated with Gini coefficient as well as with the quintile and decile dispersion ratios makes it possible to estimate theoretically the income shares of 20 and 10% groups (quintiles and deciles) for different levels of inequality. The results obtained allow identifying the specific features of changes in the share of income of these groups with the growth of inequality. The model also makes it possible to consider certain ratios between the incomes of some population groups that are typical of different inequality levels as well as to obtain for them an analytical expression; for example, such expression is obtained for the Palm ratio. These ratios can serve to some extent as some normatives for the development of the inequality reducing policy. The developed model allows also justifying the optimal (harmonious) level of inequality. In the annex the results of the estimation of the new inequality indicator for 18 countries are given.

Keywordsinequality, income, model, sequence, polynomial, distribution, inequality indicator.
Received30.11.2020
Publication date16.12.2020
Number of characters32630
Cite  
100 rub.
When subscribing to an article or issue, the user can download PDF, evaluate the publication or contact the author. Need to register.

Number of purchasers: 0, views: 758

Readers community rating: votes 0 

1. Aivazian S.A. (2012). Analysis of the quality and lifestyle of the population: An econometric ap-proach. Moscow: Nauka (in Russian).
2. Alvaredo F., Atkinson A.B., Piketty T., Saez E. (2013). The top 1 percent in international and historical perspective. Journal of Economic Perspectives, 27 (3), 3–20.
3. Alvaredo F., Chancel L., Piketty T., Saez E., Zucman G. (2017). Global inequality dynamics: New findings from WID.World. WID.World Working Paper, 2017/1.
4. Atkinson A., Piketty T., Saez E. (2011). Top incomes in the long run of history. Journal of Economic Literature, 49, 1, 3–71.
5. Atkinson A.B. (1970). On the measurement of inequality. Journal of Economic Theory, 2 (3), 244–263.
6. Ayvazyan S.A., Mkhitaryan V.S. (1998). Applied statistics and fundamentals of econometrics. Moscow: UNITI (in Russian).
7. Blanchet T., Fournier J., Piketty T. (2017). Generalized Pareto curves: Theory and applica-tions. WID.World Working Paper, 2017/3.
8. Doyle M., Stiglitz J. (2014). Eliminating extreme inequality: A sustainable development goal, 2015–2030. Ethics and International Affairs, 28 (10), 1–7.
9. Novokmet F., Piketty T., Zucman G. (2017). From Soviets to oligarchs: Inequality and proper-ty in Russia, 1905–2016. NBER Working Paper. No. 23712. August.
10. Palma J.G. (2014). Has the income share of the middle and upper-middle been stable over time, or is its current homogeneity across the world the outcome of a process of convergence? The 'Palma Ratio' revisited. Cambridge Working Papers in Economics 1437. Faculty of Economics. University of Cambridge.
11. Piketty T. (2014). Capital in the twenty-first century. Cambridge: Harvard University Press.
12. Piketty T., Saez E. (2006). The evolution of top incomes: A historical and international perspective. American Economic Review, 96 (2), 200–205. Available at: http://emlab.berkeley.edu/users/saez/piketty-saezOUP04US.pdf 
13. Saez E. (2015). Striking it Richer: The evolution of top incomes in the United States (updated with 2014 preliminary estimates). WID.World Technical Note, 6.
14. Sen A. (1976). Poverty: An ordinal approach to measurement. Econometrica, 44 (2), 219–231, March.
15. Shevyakov A.Yu. (2010). Social inequality: Impediment to the economic and demograph-ic growth. The Level of life of Population of Regions of Russia, 5, 38–52 (in Russian).
16. Stiglitz J. (2012). The price of inequality: How today's divided society endangers our future. N.Y., London: W.W. Norton&Company.
17. Theil H. (1967). Economics and information theory. Amsterdam: North-Holland.
18. Tikhonova N.E. (2018) Stratification by life chances of mass strata of modern Russian society. Sociological Studies, 6, 53–65 (in Russian).
19. Varshavsky A. (2008). Basic income and increasing income inequality in Russia. 12th BIEN Congress 2008, Dublin. BIEN World Congress on Basic Income — Dublin, Ireland —  Papers and Presentations. Available at: https://www.socialjustice.ie/sites/default/files/attach/policy-issue-article/3321/5eiialexandervarshavskybiandrussia.doc 
20. Varshavsky A. (2009). A new model of income distribution based on polynomial with roots on the unit circle. Etica del desarrollo humano y justicia global. Instituciones y ciudadanos res-ponsables ante el reto de la pobreza. VIII Congreso Internacional de IDEA. Valencia: Nau Llibres, del 2 al 4 de diciembre de 2009. ISBN: 978-84-7642-791-0.
21. Varshavsky A. (2010). Assessing reasonable limits of inequality on the basis of a new model of income distribution. Intellectual Economics, 1 (7), 63–75. Available at: https://www.mruni.eu/upload/iblock/451/Varshavsky.pdf 
22. Varshavsky A.E. (2007a). Significant reduction of income inequality is the most important condition for the transition to an innovative economy based on knowledge. Economics and Mathematical Methods, 43, 4, 35–55 (in Russian).
23. Varshavsky A.E. (2010a). Problems of mutual changes of the main components of social stratification under the shocks. Economics and Mathematical Methods, 46, 2, 3–22(in Russian).
24. Varshavsky A.E. (2013). On the choiceof the tax rateon personal income. Concepcii, 2 (31), 3–23(in Russian).
25. Varshavsky A.E. (2017). Model of inequality described by a finite functional sequence with a characteristic polynomial whose roots lie on the unit circle. Concepcii, 1, 73–83 (inRussian).
26. Varshavsky A.E. (2019). Excessive income inequality — problems and threats for Russia. Sociological Studies, 10, 19, 52–61 (in Russian).
27. Varshavsky A.E. (2007b). Slowing down diffusion of innovations and transition to knowledge-based society under income inequality growth. Concepcii, 2(in Russian).

Система Orphus

Loading...
Up