Econophysical anchoring of unimodal power-law distributions

Iddo I. Eliazar, Morrel H. Cohen

Research output: Contribution to journalArticle

12 Scopus citations

Abstract

The sciences are abundant with size distributions whose densities have a unimodal shape and power-law tails both at zero and at infinity. The quintessential examples of such unimodal and power-law (UPL) distributions are the sizes of income and wealth in human societies. While the tails of UPL distributions are precisely quantified by their corresponding power-law exponents, their bulks are only qualitatively characterized as unimodal. Consequently, different statistical models of UPL distributions exist, the most popular considering lognormal bulks. In this paper we present a general econophysical framework for UPL distributions termed 'the anchoring method'. This method: (i) universally approximates UPL distributions via three 'anchors' set at zero, at infinity, and at an intermediate point between zero and infinity (e.g. the mode); (ii) is highly versatile and broadly applicable; (iii) encompasses the existing statistical models of UPL distributions as special cases; (iv) facilitates the introduction of new statistical models of UPL distributions and (v) yields a socioeconophysical analysis of UPL distributions.

Original languageEnglish (US)
Article number365001
JournalJournal of Physics A: Mathematical and Theoretical
Volume46
Issue number36
DOIs
StatePublished - Sep 13 2013

All Science Journal Classification (ASJC) codes

  • Statistical and Nonlinear Physics
  • Statistics and Probability
  • Modeling and Simulation
  • Mathematical Physics
  • Physics and Astronomy(all)

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