Inequality in the Distribution of Incomes: A Microstatistical Approach Borrowed from Statistical Thermodynamics

Abstract

Points out that differences in the background of the working population, are often made responsible for the observed inequality of income distribution. Explores whether the observed distribution in incomes in countries such as the Federal Republic of Germany (West and East), Great Britain, Sweden, the United States and Brazil could not be the result of a statistical distribution process in which households participate. Recalls the early work in statistical thermodynamics by Boltzmann and Maxwell, who studied the distribution of energy among an ensemble of identical molecules, and which showed that not all molecules hold the same energy, but rather that the distribution has an exponential fall‐off character, with most molecules being in the lower energy bracket. Adapts the Maxwell‐Boltzmann distribution to incomes, and transforms these distributions into well‐known Lorenz graphs, and obtains a perfect match for each examined country. Suggests that, as the distributions can be directly related to their corresponding statistical weights, and as their logarithms are proportional to entropy in statistical thermodynamics, it could be shown that the unequal income distribution has a higher entropy, and therefore is more stable than the corresponding low entropy distribution resulting from Boulding′s principle of equal advantage where all households earn the same income. Supposes that neither of the two extreme stand‐points to explain the inequality of incomes can lead to a totally satisfactory explanation. Proposes that evolutionary strategies may be an interesting lead to follow up in more detail.

Citation

Kohlmaier, G.H. and Lüdeke, M.K.B. (1993), "Inequality in the Distribution of Incomes: A Microstatistical Approach Borrowed from Statistical Thermodynamics", International Journal of Social Economics, Vol. 20 No. 10, pp. 23-45. https://doi.org/10.1108/03068299310045389