Income distribution in the European Union versus in the United States

We prove that the refined approach–our extension of the Yakovenko et al. formalism–is universal in the sense that it describes well both household incomes in the European Union and individual incomes in the United States for all income social classes. This formalism, supplemented in this work by the...

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Bibliographic Details
Published inPhysica A Vol. 433; pp. 36 - 41
Main Authors Jagielski, Maciej, Duczmal, Rafał, Kutner, Ryszard
Format Journal Article
LanguageEnglish
Published Elsevier B.V 01.09.2015
Subjects
Financial crisis
Income distribution
Yakovenko model
Income distribution
Yakovenko model
Financial crisis
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Summary:We prove that the refined approach–our extension of the Yakovenko et al. formalism–is universal in the sense that it describes well both household incomes in the European Union and individual incomes in the United States for all income social classes. This formalism, supplemented in this work by the entropy analysis, allowed the study of the impact of the recent world-wide financial crisis on the annual incomes of different income social classes. Hence, we find the most painful impact of the crisis on incomes of all income social classes. Furthermore, we indicate the existence of a possible market crisis precursor. •We demonstrated the first comparison of income distribution in the EU and the US.•Our formula describes the income of the EU households and the US individuals.•Recent financial crisis was the most painful for the medium- and high-income classes.
ISSN:0378-4371
1873-2119
DOI:10.1016/j.physa.2015.03.071