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Some universal patterns in income distribution: An econophysics approach

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  • Anwar Shaikh
  • Amr Ragab

Abstract

The econophysics “two‐class” approach yields a novel theoretical and empirically robust relation: The per capita income y‾(x) $\overline{y}(x)$ of any bottom fraction (x) of the population equals a(x)∙(1−G) y‾ $\overline{y}$, where a(x) is a coupling coefficient, G the Gini, and y‾ $\overline{y}$ is national per capita income. For the bottom 70%, a(70) = 1, which yields the Sen inequality adjustment to the 1993 UNDP Human Development Index, without any reliance on social welfare functions. Alternately, a(80) = 1.1 yields the bottom 80% per capita income (Vast Majority Income). We propose the latter as a new inequality‐adjusted measure of wellbeing.

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  • Anwar Shaikh & Amr Ragab, 2023. "Some universal patterns in income distribution: An econophysics approach," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 248-264, February.
    • Handle: RePEc:bla:metroe:v:74:y:2023:i:1:p:248-264
    DOI: 10.1111/meca.12412
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