Model Of Income Distribution Research Articles

Measuring income inequality via percentile relativities

The adage “the rich are getting richer” refers to increasingly skewed and heavily-tailed income distributions. For such distributions, the mean is not the best measure of the center, but the classical indices of income inequality, including the celebrated Gini index, are mean based. In view of this, it has been proposed in the literature to incorporate the median into the definition of the Gini index. In the present paper we make a further step in this direction and, to acknowledge the possibility of differing viewpoints, investigate three median-based indices of inequality. These indices overcome past limitations, such as: (1) they do not rely on the mean as the center of, or a reference point for, income distributions, which are skewed, and are getting even more heavily skewed; (2) they are suitable for populations of any degree of tail heaviness, and income distributions are becoming increasingly such; and (3) they are unchanged by, and even discourage, transfers among the rich persons, but they encourage transfers from the rich to the poor, as well as among the poor to alleviate their hardship. We study these indices analytically and numerically using various income distribution models. Real-world applications are showcased using capital incomes from 2001 and 2018 surveys from fifteen European countries.

Optimization model growth and equalization of farmer’s income in the rotiklot dam service area on the border area of Indonesia-Timor Leste

The study aims to analyze optimization models of growth and income distribution. The study used a survey method in Fatuketi Village, Kakuluk Mesak District as the Rotiklot Dam service area, with a sample of 300 respondents. Data analysis uses a multi-objective linear programming model for growth and equal distribution of agricultural income. The results of the analysis show that an income of IDR 11,576,192.00 per year is an income that optimizes growth and income distribution. Optimizing growth and equal distribution shows that the average income of farmers in the first planting season was IDR. 4,132,108 and IDR. 7,444,084 in planting season II. The marginal land used is 300 ha with the volume of water needed to meet all plant needs as much as 1,986,565.16 m3. Agricultural income can still be increased for the third planting season because there is still excess water of 948,434.84 m3.

An Open Economy Neoclassical Model of Growth and Income Distribution

An Open Economy Neoclassical Model of Growth and Income Distribution

Secular stagnation: a Classical–Marxian view

We study a model of secular stagnation, income and wealth distribution, and employment in the Classical–Marxian (CM) tradition, with the purpose of drawing a contrast with established Neoclassical accounts of the topic (Piketty 2014, Gordon 2015). In these explanations, which assume full employment of labor at all times, an exogenous reduction in the growth rate g increases the difference with the endogenous rate of return to capital r. The capital–income ratio rises and, if the elasticity of substitution is above one, the wage share falls. Our explanation does not presuppose full employment, and features a crucial tension between profit-driven capital accumulation and wage-driven labor-augmenting technical change: both these features are defining for CM economics and have been emphasized in recent heterodox macro literature. Institutional or technological shocks that lower the wage share initially foster capital accumulation – which is profit-driven – and increase wealth inequality. However, the effect on long-run growth is negative, because a reduction in the wage share lessens the incentives by firms to introduce labor-saving innovation, which is wage-driven. The capital–income ratio must rise in order to restore balanced growth and stabilize employment in the long run; and the increase in wealth inequality is permanent. The ultimate effect on long-run employment depends on the relative strength of the response of technical change versus real wage growth to labor market institutions: we identify a simple condition that delivers either a wage-led or a profit-led long-run employment regime. We then test the model using time-series data for the US (1960–2019): impulse responses from vector error-correction model (VECM) estimators lend support to the main predictions of our model, and point to the employment–population ratio being wage-led.

Three-Part Composite Pareto Modelling for Income Distribution in Malaysia

Income distribution models can be useful for describing the economic properties of a population. In this study, three-part composite Pareto models are fitted to the income distribution in Malaysia for the years 2007, 2009, 2012, 2014, and 2016. The three-part composite Pareto models divide the population into three parts, each following a different distribution model. The lower part follows the inverse Pareto distribution, the upper part follows the Pareto distribution, and the middle part follows another unspecified distribution model. For application in income data, the use of Gaussian mixture distribution is proposed for the middle part, making the inverse Pareto–Gaussian mixture-Pareto distribution model semi-parametric. From the model, it is found that the levels of income inequality in the lower and upper income groups decrease over the period of study. Additionally, the proportion of data following the inverse Pareto distribution in the model is highly correlated with the official absolute poverty incidence.

The middle class: An analysis of the dependence of size on the level of income inequality

The article examines the dependence of the middle class size on the level of income inequality. For this purpose, the indicators that characterize the size of the middle class (the share of income of the middle class as a whole and the shares of its different strata) are analyzed. For this the analytical expressions were used which were found using the income distribution model based on the finite functional sequence that was developed by the author and described earlier in several articles. The results obtained in the work show a certain stability of the income share of the middle class as a whole in a rather wide range of the level of income inequality. At the same time, it is shown that there are significant differences in the dependence of the income shares of various middle class strata on the level of inequality. With the help of analytical expressions obtained on the basis of the developed model, a diagram is constructed for an approximate assessment of the middle class size depending on the level of income inequality. This diagram allows to estimate the size of the middle class for its various definitions in relation to the median income. Based on the results obtained, some variants of the possible reaction of the middle class as a whole and its individual strata to the increase in income inequality were considered. It is concluded that the middle class, being a source of stability, at the same time can become the initiator of the income inequality reduction when the inequality level is very high.

Risk allocation and benefit distribution of PPP projects for construction waste recycling: a case study of China

PurposePublic-private partnership (PPP) projects for construction waste recycling have become the main approach to construction waste treatment in China. Risk sharing and income distribution of PPP projects play a vital role in achieving project success. This paper is aimed at building a practical and effective risk sharing and income distribution model to achieve win–win situation among different stakeholders, thereby providing a systematic framework for governments to promote construction waste recycling.Design/methodology/approachStakeholders of construction waste recycling PPP projects were reclassified according to the stakeholder theory. Best-worst multi–criteria decision-making method and comprehensive fuzzy evaluation method (BWM–FCE) risk assessment model was constructed to optimize the risk assessment of core stakeholders in construction waste recycling PPP projects. Based on the proposed risk evaluation model for construction waste recycling PPP projects, the Shapley value income distribution model was modified in combination with capital investment, contribution and project participation to obtain a more equitable and reasonable income distribution system.FindingsThe income distribution model showed that PPP Project Companies gained more transaction benefits, which proved that PPP Project Companies played an important role in the actual operation of PPP projects. The policy change risk, investment and financing risk and income risk were the most important risks and key factors for project success. Therefore, it is of great significance to strengthen the management of PPP Project Companies, and in the process of PPP implementation, the government should focus on preventing the risk of policy changes, investment and financing risks and income risks.Practical implicationsThe findings from this study have advanced the application methods of risk sharing and income distribution for PPP projects and further improved PPP project-related theories. It helps to promote and rationalize fairness in construction waste recycling PPP projects and to achieve mutual benefits and win–win situation in risk sharing. It has also provided a reference for resource management of construction waste and laid a solid foundation for long-term development of construction waste resources.Originality/valuePPP mode is an effective tool for construction waste recycling. How to allocate risks and distribute benefits has become the most important issue of waste recycling PPP projects, and also the key to project success. The originality of this study resides in its provision of a holistic approach of risk allocation and benefit distribution on construction waste PPP projects in China as a developing country. Accordingly, this study adds its value by promoting resource development of construction waste, extending an innovative risk allocation and benefit distribution method in PPP projects, and providing a valuable reference for policymakers and private investors who are planning to invest in PPP projects in China.

Kinetic exchange income distribution models with saving propensities: inequality indices and self-organized poverty level

We report the numerical results for the steady-state income or wealth distribution [Formula: see text] and the resulting inequality measures (Gini [Formula: see text] and Kolkata [Formula: see text] indices) in the kinetic exchange models of market dynamics. We study the variations of [Formula: see text] and of the indices [Formula: see text] and [Formula: see text] with the saving propensity [Formula: see text] of the agents, with two different kinds of trade (kinetic exchange) dynamics. In the first case, the exchange occurs between randomly chosen pairs of agents and in the next, one of the agents in the chosen pair is the poorest of all and the other agent is randomly picked up from the rest of the population (where, in the steady state, a self-organized poverty level or SOPL appears). These studies have also been made for two different kinds of saving behaviours. One, where each agent has the same value of [Formula: see text] (constant over time) and the other where [Formula: see text] for each agent can take two values (0 and 1), changing randomly over a fraction of time [Formula: see text] of choosing [Formula: see text]. We find that the inequality decreases with increasing savings ([Formula: see text]); inequality indices ([Formula: see text] and [Formula: see text]) decrease and SOPL increases with increasing [Formula: see text], indicating possible applications in economic policy making. This article is part of the theme issue 'Kinetic exchange models of societies and economies'.

Beyond normative system boundaries in life cycle assessment: The environmental effect of income redistribution

The current practice for assessing the environmental life cycle impacts of a product system is limited to the activities that respond directly to a change in demand. The revenue resulting from this change in demand is then used to pay for primary factors, such as wages and taxes, while the redistribution of that money is left outside the system boundaries. The aim of this paper is to address this limitation by providing a method in which the second order effects, i.e., the effects of re-spending that money, are included. For that, an income distribution model based on a simplified stock-flow consistent framework was developed. The method is applied in a closed economy consisting of six industries, banks and three household income groups. The dynamics of the income redistribution effects are studied throughout the rounds of (re)distribution, showing that the perturbation has a permanent effect on the economy, from environmental and social perspectives, and major changes occur in the first period of distribution. In addition, the paper also provides insights on the next steps for developing a full-scale model and discussions on the relationship between income distribution and productivity growth.

Configuration optimization and benefit allocation model of multi-park integrated energy systems considering electric vehicle charging station to assist services of shared energy storage power station

Energy storage (ES) has a significant impact on increasing the use of clean energy and lowering carbon emissions. But the high cost of ES limits its large-scale development. Hence, considering the various scenarios and electric vehicles' uncertainties, this paper develops a three-layer planning and scheduling model for the electric vehicle charging station (EVCS) to assist the shared energy storage power station (SESPS) in serving multi-park integrated energy systems. To assess the model's effectiveness, environmental factors are established. And a profit distribution model based on the Shapley value is established to increase the cooperation enthusiasm of each participant. The results show that: (1) The established model reduced the cost of the multi-park by 55.32% and increased the profit of the EVCS by 775.37%. Comparing to self-operation, the EVCS assisted the SESPS reduced capacity by 26.40% and increased profit by 120.31%. (2) With the participation of ES equipment, the utilization rate of new energy reached 100% and the carbon emission was reduced by 55.77%. (3) The improved Shapley value reduced the SESPS's payback period from 2.13 years to 1.12 years, allowing SESPS operators to work more effectively with multiple participants. Therefore, the planning, scheduling, and income distribution model proposed in this paper can improve clean energy utilization, reduce carbon emissions, and increase participants' willingness to cooperate on the basis of maximizing each participant's benefits. It is a reference for complex energy system planning, scheduling, and revenue distribution, as well as a way of encouraging clean energy use.

A New Goodness of Fit Measure Based on Income Inequality Curves

This paper uses inequality-measurement techniques to assess goodness of fit in income distribution models. It exposes the shortcomings of the use of conventional goodness of fit criteria in face of the big income data and proposes a new set of metrics, based on income inequality curves. In this note, we mentioned that the distance between theoretical and empirical inequality curves can be considered as a goodness of fit criterion. We demonstrate certain advantages of this measure over the other general goodness of fit criteria. Unlike other goodness of fit measures, this criterion is bounded. It is 0 in minimum difference and 1 in maximum distance. Furthermore, there is a consistency between this new goodness of fit measure and the other conventional criteria. A simulation study based on fitted distribution to real income data is performed in order to investigate some statistical properties of the new goodness of fit measure. An empirical study and comparisons are also provided.

Income distribution, technical change, and economic growth: A two-sector Kalecki–Kaldor approach

This paper presents a two-sector Kalecki–Kaldor model of income distribution, technical change, and economic growth. The model is Kaleckian in the sense that it incorporates mark-up pricing, investment independent of saving, and excess capacity. It is also Kaldorian, in that labour productivity growth is led by Kaldor’s technical progress function. In other words, productivity growth is endogenously realised through the technology embodied in new capital stock, which differentiates our model from previous two-sector models. Our extension drastically changes the standard Kaleckian implications. We find that although the economic activity levels in the short run are led by the demand and income distribution parameters, economic growth in the long run is realised by supply-side (i.e. technical change and the associated productivity and wage growth) parameters. The important implication of our findings is that a two-sector economy faces a trade-off between a high economic growth rate and the local stability of the steady state.

A Probabilistic Stochastic Income Distribution Model of Coal Mining Industry

Coal mining is a profitable enterprise. It creates job opportunities, generates revenue, and attract the foreign investment of a country. However, coal mining faces some challenges. To address the allocation of capital related to coal mining, an approach has been made to improve the impact of coal mining industry on the economy of one of Indonesia most important coal producing region, south Kalimantan. A total of seven households of large-scale and small-scale mining are analyzed in the study. Various copula-based prediction probability models were established, and the exponential distribution function of household income distribution was obtained with maximum range by utilizing the application of Monte Carlo simulation. Moreover, this research spells out the importance of income distribution of various household dynamics which will help the policy maker in economic analysis and financial decisions related to various household categories

Financial Coordination and Income Distribution of Agricultural Supply Chain

The agriculture field is a fundamental industry which supports the rapid development of the nation’s economy. However, credit constraints faced by farmers have restricted the modernization in the agricultural industry. The agricultural supply chain finance is effective in promoting rural industrial revitalization and agricultural modernization, which is of great significance to the transformation and development of rural economy and agriculture in China. In this paper, the financial coordination model in agricultural supply chain is constructed, and the income distribution model of Shapley value method is introduced. The results showed that the agricultural supply chain finance can significantly improve the income of the participants in the agricultural industrial chain and verify the economic feasibility of agricultural supply chain finance.

Important contributions of the Cambridge Equation to the role of political economy: from Pasinetti to our days

The theory of the long-run perspective aims to explain how economies grow. On the other hand, Kaldor developed a theory that concerns not only this objective but to build a model also considering the implications in the income distribution. This paper consists of a rigorous review of the evolution of Kaldor’s Theory, treating with government activities, the financial market, and so on, to show the importance of the theme in our days. One contribution of this paper is to lead the researchers to a solid understanding of Growth and Income Distribution Models derivate from the Cambridge School and to present a new vision of the relevance of the heterodox scientific world.

Income and Wealth Distribution in Macroeconomics: A Continuous-Time Approach

Abstract We recast the Aiyagari–Bewley–Huggett model of income and wealth distribution in continuous time. This workhorse model—as well as heterogeneous agent models more generally—then boils down to a system of partial differential equations, a fact we take advantage of to make two types of contributions. First, a number of new theoretical results: (1) an analytic characterization of the consumption and saving behaviour of the poor, particularly their marginal propensities to consume; (2) a closed-form solution for the wealth distribution in a special case with two income types; (3) a proof that there is a unique stationary equilibrium if the intertemporal elasticity of substitution is weakly greater than one. Second, we develop a simple, efficient and portable algorithm for numerically solving for equilibria in a wide class of heterogeneous agent models, including—but not limited to—the Aiyagari–Bewley–Huggett model.

Research on Cooperation Between Wind Farm and Electric Vehicle Aggregator Based on A3C Algorithm

As renewable energy sources such as wind are connected to the grid on a large scale, the safe and stable operation of the power system is facing challenges and the demand for flexibility is becoming increasingly prominent. In recent years, with the advancement of Vehicle-to-Grid (V2G) technology, electric vehicles (EVs) have become a non-negligible flexibility resource for the power system and an emerging path to solve the renewable energy consumption problem. To address the problem of wind farms’ difficulty in making profits in the power market, this paper considers the cooperation between wind farms and EV aggregators and uses the levelable characteristics of EVs charging load to ease the anti-peak characteristics of wind power. Given this, this paper proposes a cooperation mode between the wind farm and the Electric Vehicle (EV) aggregator, constructs a cooperation income and income distribution model, and solves the model using the Asynchronous Advantage Actor-Critic (A3C) reinforcement learning algorithm. Finally, based on the simulation analysis of historical data, the following conclusions are drawn: (1) the cooperation between the wind farm and the EV aggregator can effectively mitigate the negative impact of the anti-peak characteristics of wind power on profitability and achieve an increase in overall economic benefits; (2) the income distribution based on the Shapley value method ensures that the respective income of the wind farm and the EV aggregator increase after cooperation, which is conducive to the promotion of the willingness of both parties to cooperate; (3) the A3C reinforcement learning algorithm is applied to solve the model with good convergence to achieve fast and continuous intelligent pricing decisions for EV aggregators, thus optimizing the charging schedule of EVs promptly.

Global redistribution of income and household energy footprints: a computational thought experiment

Non-technical summary Global income inequality and energy consumption inequality are related. High-income households consume more energy than low-income ones, and for different purposes. Here, we explore the global household energy consumption implications of global income redistribution. We show that global income inequality shapes not only inequalities of energy consumption but the quantity and composition of overall energy demand. Our results call for the inclusion of income distribution into energy system models, as well as into energy and climate policy. Technical summary Despite a rapidly growing number of studies on the relationship between inequality and energy, there is little research estimating the effect of income redistribution on energy demand. We contribute to this debate by proposing a simple but granular and data-driven model of the global income distribution and of global household energy consumption. We isolate the effect of income distribution on household energy consumption and move beyond the assumption of aggregate income–energy elasticities. First, we model expenditure as a function of income. Second, we determine budget shares of expenditure for a variety of products and services by employing product-granular income elasticities of demand. Subsequently, we apply consumption-based final energy intensities to product and services to obtain energy footprint accounts. Testing variants of the global income distribution, we find that the ‘energy costs’ of equity are small. Equitable and inequitable distributions of income, however, entail distinct structural change in energy system terms. In an equitable world, fewer people live in energy poverty and more energy is consumed for subsistence and necessities, instead of luxury and transport. Social media summary Equality in global income shifts household energy footprints towards subsistence, while inequality shifts them towards transport and luxury.

Classical Political Economy and Secular Stagnation

This paper presents a model of secular stagnation, income and wealth distribution, and employment in the Classical Political Economy tradition, that can be contrasted with the accounts by Piketty (2014) and Gordon (2015). In these explanations, an exogenous reduction in the growth rate g --because of declining fertility or the exhaustion of path-breaking scientific discoveries--increases the difference with the rate of return to capital r. The capital-income ratio rises, and if the elasticity of substitution is above one, the wage share falls. Both Piketty and Gordon assume full employment at all times. In our explanation, which does not presuppose full employment, the key tension is between profit-driven capital accumulation and wage-driven labor-augmenting technical change: both are defining for Classical Political Economy, and have been emphasized in recent heterodox macro literature. Labor-crushing institutional or technological shocks initially foster capital accumulation -which is profit-driven-- and increase wealth inequality. However, the effect on long-run growth is negative, because of the reduced incentives by firms to introduce labor-saving innovation, which is wage-driven. The capital/income ratio must rise in order to restore balanced growth in the long run; and the increase in wealth inequality is permanent. The ultimate effect on long-run employment depends on the strength of the response of labor-augmenting technical change vs. the response of real wage growth to labor market institutions: accordingly, long-run employment can either be wage-led or profit-led. We then test the model using time-series data for the US (1990-2019): the test offers support to the main predictions of our model, and to the employment-population ratio being wage-led.

Corporate Waqf: a sustainable model of Islamic wealth creation and distribution

Waqf has the potential to function as a mechanism towards improving the welfare of the ummah . Even though waqf has been long practised in all Muslim countries, each country has different methods of implementing it. Issues pertaining to waqf have become the most talked about agenda among Muslim scholars, administrators, and academics, particularly, the deficiencies of the conventional model and the lack of knowledge among practitioners, which has led to the mismanagement of waqf assets. The need to expand the conventional Waqf concept into business practices in achieving Islamic transformation agenda and wealth creation is, therefore, crucial. The aim of this study is to explore a holistic corporate waqf model to be used by organisations to address social issues and to create wealth for the ummah . A Tawhidic concept premised on the Quran and Sunnah was used to underpin the development of the proposed corporate waqf model. Content analyses of existing academic literature on Waqf , followed by preliminary semi-structured interviews, were conducted to provide a framework for the development of the corporate waqf model. The findings from this study would be of interest to academics, regulators, and practitioners in our quest to improve the existing waqf model of income distribution to maximize wealth for the ummah through a more efficient and effective wealth management system of governance and accountability.