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Evidence for the exponential distribution of income in the USA

Author

Listed:
  • A. Drăgulescu

    (Department of Physics, University of Maryland, College Park, MD 20742-4111, USA)

  • V.M. Yakovenko

    (Department of Physics, University of Maryland, College Park, MD 20742-4111, USA)

Abstract

Using tax and census data, we demonstrate that the distribution of individual income in the USA is exponential. Our calculated Lorenz curve without fitting parameters and Gini coefficient 1/2 agree well with the data. From the individual income distribution, we derive the distribution function of income for families with two earners and show that it also agrees well with the data. The family data for the period 1947-1994 fit the Lorenz curve and Gini coefficient 3/8 = 0.375 calculated for two-earners families.

Suggested Citation

  • A. Drăgulescu & V.M. Yakovenko, 2001. "Evidence for the exponential distribution of income in the USA," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 20(4), pages 585-589, April.
    • Handle: RePEc:spr:eurphb:v:20:y:2001:i:4:d:10.1007_pl00011112
    DOI: 10.1007/PL00011112
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