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Inheritances, social classes, and wealth distribution

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  • Pedro Patr'icio
  • Nuno A. M. Ara'ujo

Abstract

We consider a simple theoretical model to investigate the impact of inheritances on the wealth distribution. Wealth is described as a finite resource, which remains constant over different generations and is divided equally among offspring. All other sources of wealth are neglected. We consider different societies characterized by a different offspring probability distribution. We find that, if the population remains constant, the society reaches a stationary wealth distribution. We show that inequality emerges every time the number of children per family is not always the same. For realistic offspring distributions from developed countries, the model predicts a Gini coefficient of $G\approx 0.3$. If we divide the society into wealth classes and set the probability of getting married to depend on the distance between classes, the stationary wealth distribution crosses over from an exponential to a power-law regime as the number of wealth classes and the level of class distinction increase.

Suggested Citation

  • Pedro Patr'icio & Nuno A. M. Ara'ujo, 2021. "Inheritances, social classes, and wealth distribution," Papers 2106.14758, arXiv.org.
    • Handle: RePEc:arx:papers:2106.14758
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    Cited by:

    1. Takeshi Kato & Mohammad Rezoanul Hoque, 2024. "Wealth inequality and utility: Effect evaluation of redistribution and consumption morals using macro-econophysical coupled approach," Papers 2405.13341, arXiv.org.
    2. Kanjina, Sukit, 2021. "Farmers' Use of Social Media and its Implications for Agricultural Extension: Evidence from Thailand," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 11(04), January.
    3. Max Greenberg & H. Oliver Gao, 2024. "Twenty-five years of random asset exchange modeling," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 97(6), pages 1-27, June.
    4. Scott, Carol F. & Bay-Cheng, Laina Y. & Nochajski, Thomas H. & Lorraine Collins, R., 2024. "Emerging adults’ social media engagement & alcohol misuse: A multidimensional, person-centered analysis of risk," Children and Youth Services Review, Elsevier, vol. 159(C).
    5. Kirchengast, Sylvia & Waldhör, Thomas & Juan, Alfred & Yang, Lin, 2024. "Secular trends and regional pattern in body height of Austrian conscripts born between 1961 and 2002," Economics & Human Biology, Elsevier, vol. 53(C).

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