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Activity Number:
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326
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Type:
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Contributed
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Date/Time:
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Tuesday, August 4, 2009 : 10:30 AM to 12:20 PM
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Sponsor:
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Business and Economic Statistics Section
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| Abstract - #303480 |
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Title:
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Two Similar Particle System Models of Wage Income Distribution Conditioned on Education
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Author(s):
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John Angle*+
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Companies:
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Inequality Process Institute
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Address:
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Post Office Box 215, Lafayette Hill, PA, 19444-0215,
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Keywords:
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econophysics ; Inequality Process ; Kinetic Theory of Gases ; labor Income distribution ; particle system ; test of fit
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Abstract:
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In the Inequality Process (IP) particles compete for "wealth", a positive quantity. The % of wealth lost in a loss is the particle's parameter. The IP's meta-theory implies that the complement of a particle's loss represents human capital. The IP's stationary distribution fits the distribution of labor income conditioned on education. A recent transformation of the Kinetic Theory of Gases (KTG) yields a model similar to the IP. This model, the Saved Wealth model (SW) differs from the IP in the r.v. driving wealth exchange between particles. This paper finds whether the SW passes tests set by the IP's meta-theory including fitting the distribution of labor income conditioned on education. The SW passes tests set by the IP's meta-theory but is a poorer overall fit to data. The IP's stationary distribution fits the distribution of labor income of the more educated better.
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