Correlation between Gini index and mobility in a stochastic kinetic model of economic exchange

Maria Letizia Bertotti, Amit K. Chattopadhyay, Giovanni Modanese*

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

Starting from a class of stochastically driven kinetic models of economic exchange, here we present results highlighting the correlation of the Gini inequality index with the social mobility rate, close to dynamical equilibrium. Except for the ”canonical-additive case”, our numerical results consistently indicate negative values of the correlation coefficient, in agreement with empirical evidence. This confirms that growing inequality is not conducive to social mobility which then requires an “external source” to sustain its dynamics. On the other hand, the sign of the correlation between inequality and total income in the canonical ensemble depends on the way wealth enters or leaves the system. At a technical level, the approach involves a generalization of a stochastic dynamical system formulation, that further paves the way for a probabilistic formulation of perturbed economic exchange models.
Original languageEnglish
Pages (from-to)2081-2084
Number of pages4
JournalResults in Physics
Volume7
Early online date24 Jun 2017
DOIs
Publication statusPublished - 2017

Fingerprint

economics
kinetics
income
formulations
correlation coefficients
dynamical systems
leaves

Bibliographical note

Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)

Keywords

  • Langevin
  • Gini
  • Ornstein-Uhlenbeck
  • Fokker-Planck
  • Hurst

Cite this

Bertotti, Maria Letizia ; Chattopadhyay, Amit K. ; Modanese, Giovanni. / Correlation between Gini index and mobility in a stochastic kinetic model of economic exchange. In: Results in Physics. 2017 ; Vol. 7. pp. 2081-2084.
@article{a93ebc0c8bf84c669ee4cf85a53a2a27,
title = "Correlation between Gini index and mobility in a stochastic kinetic model of economic exchange",
abstract = "Starting from a class of stochastically driven kinetic models of economic exchange, here we present results highlighting the correlation of the Gini inequality index with the social mobility rate, close to dynamical equilibrium. Except for the ”canonical-additive case”, our numerical results consistently indicate negative values of the correlation coefficient, in agreement with empirical evidence. This confirms that growing inequality is not conducive to social mobility which then requires an “external source” to sustain its dynamics. On the other hand, the sign of the correlation between inequality and total income in the canonical ensemble depends on the way wealth enters or leaves the system. At a technical level, the approach involves a generalization of a stochastic dynamical system formulation, that further paves the way for a probabilistic formulation of perturbed economic exchange models.",
keywords = "Langevin, Gini, Ornstein-Uhlenbeck, Fokker-Planck, Hurst",
author = "Bertotti, {Maria Letizia} and Chattopadhyay, {Amit K.} and Giovanni Modanese",
note = "Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)",
year = "2017",
doi = "10.1016/j.rinp.2017.05.031",
language = "English",
volume = "7",
pages = "2081--2084",

}

Correlation between Gini index and mobility in a stochastic kinetic model of economic exchange. / Bertotti, Maria Letizia; Chattopadhyay, Amit K.; Modanese, Giovanni.

In: Results in Physics, Vol. 7, 2017, p. 2081-2084.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Correlation between Gini index and mobility in a stochastic kinetic model of economic exchange

AU - Bertotti, Maria Letizia

AU - Chattopadhyay, Amit K.

AU - Modanese, Giovanni

N1 - Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0)

PY - 2017

Y1 - 2017

N2 - Starting from a class of stochastically driven kinetic models of economic exchange, here we present results highlighting the correlation of the Gini inequality index with the social mobility rate, close to dynamical equilibrium. Except for the ”canonical-additive case”, our numerical results consistently indicate negative values of the correlation coefficient, in agreement with empirical evidence. This confirms that growing inequality is not conducive to social mobility which then requires an “external source” to sustain its dynamics. On the other hand, the sign of the correlation between inequality and total income in the canonical ensemble depends on the way wealth enters or leaves the system. At a technical level, the approach involves a generalization of a stochastic dynamical system formulation, that further paves the way for a probabilistic formulation of perturbed economic exchange models.

AB - Starting from a class of stochastically driven kinetic models of economic exchange, here we present results highlighting the correlation of the Gini inequality index with the social mobility rate, close to dynamical equilibrium. Except for the ”canonical-additive case”, our numerical results consistently indicate negative values of the correlation coefficient, in agreement with empirical evidence. This confirms that growing inequality is not conducive to social mobility which then requires an “external source” to sustain its dynamics. On the other hand, the sign of the correlation between inequality and total income in the canonical ensemble depends on the way wealth enters or leaves the system. At a technical level, the approach involves a generalization of a stochastic dynamical system formulation, that further paves the way for a probabilistic formulation of perturbed economic exchange models.

KW - Langevin

KW - Gini

KW - Ornstein-Uhlenbeck

KW - Fokker-Planck

KW - Hurst

UR - http://www.scopus.com/inward/record.url?scp=85021673222&partnerID=8YFLogxK

U2 - 10.1016/j.rinp.2017.05.031

DO - 10.1016/j.rinp.2017.05.031

M3 - Article

AN - SCOPUS:85021673222

VL - 7

SP - 2081

EP - 2084

ER -