An agent-based interaction model for Chinese personal income distribution

Authored by Yijiang Zou, Weibing Deng, Wei Li, Xu Cai

Date Published: 2015

DOI: 10.1016/j.physa.2015.05.086

Sponsors: Chinese National Natural Science Foundation Programme of Introducing Talents of Discipline to Universities

Platforms: No platforms listed

Model Documentation: Other Narrative Mathematical description

Model Code URLs: Model code not found

Abstract

The personal income distribution in China was studied by employing the data from China Household Income Projects (CHIP) between 1990 and 2002. It was observed that the low and middle income regions could be described by the log-normal law, while the large income region could be well fitted by the power law. To characterize these empirical findings, a stochastic interactive model with mean-field approach was discussed, and the analytic result shows that the wealth distribution is of the Pareto type. Then we explored the agent-based model on networks, in which the exchange of wealth among agents depends on their connectivity. Numerical results suggest that the wealth of agents would largely rely on their connectivity, and the Pareto index of the simulated wealth distributions is comparable to those of the empirical data. The Pareto behavior of the tails of the empirical wealth distributions is consistent with that of the `mean-field' model, as well as numerical simulations. (C) 2015 Elsevier B.V. All rights reserved.

Tags

Market Network Wealth distribution Power-law tail