PARETO'S LAW FOR INCOME OF INDIVIDUALS AND DEBT OF BANKRUPT COMPANIES

Hideaki Aoyama, Wataru Souma, Yuichi Nagahara, Mitsuhiro P. Okazaki, Hideki Takayasu, Misako Takayasu

Fractals · 2000 · 130 citations · 12 references

Concepts

Abstract

We analyze the distribution of income and income tax of individuals in Japan for the fiscal year 1998. From the rank-size plots, we find that the accumulated probability distribution of both data obey a power law with a Pareto exponent very close to -2. We also present an analysis of the distribution of the debts owed by bankrupt companies from 1997 to March 2000, which is consistent with a power law behavior with a Pareto exponent equal to -1. This power law is the same as that of the income distribution of companies. Possible implications of these findings for model building are discussed.

References

12