An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK

Elvis Oltean; Fedor V. Kusmartsev

doi:doi:10.11648/j.ajpa.20140203.11

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An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK

Elvis Oltean, Fedor V. Kusmartsev

Received: 20 April 2014 Accepted: 6 May 2014 Published: 20 May 2014

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Abstract

We extend the exploration regarding dynamic approach of macroeconomic variables by tackling systematically expenditure using Statistical Physics models (for the first time to the best of our knowledge). Also, using polynomial distribution which characterizes the behavior of dynamic systems in certain situations, we extend also our analysis to mean income data from the UK that span for a time interval of 35 years. We find that most of the values for coefficient of determination obtained from fitting the data from consecutive years analysis to be above 80%. We used for our analysis first degree polynomial, but higher degree polynomials and longer time intervals between the years considered can dramatically increase goodness of the fit. As this methodology was applied successfully to income and wealth, we can conclude that macroeconomic systems can be treated similarly to dynamic systems from Physics. Subsequently, the analysis could be extended to other macroeconomic indicators.

DOI	10.11648/j.ajpa.20140203.11
Published in	American Journal of Physics and Applications (Volume 2, Issue 3, May 2014)
Page(s)	73-77
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Dynamic Systems, Polynomial Distribution, Lower Limit on Expenditure, Gross Expenditure, Disposable Expenditure

References

[1]	E. Oltean, F.V. Kusmartsev, A dynamic approach to income and wealth distribution, unpublished
[2]	“Upper limit on income by decile group in 1987–2009 in Finland”, URL: http://www.stat.fi/til/tjt/2009/tjt_2009_2011-0520_tau_005_en.html
[3]	A. Dragulescu, V. M. Yakovenko, “Statistical Mechanics of Money, Income, and Wealth: A Short Survey”, URL: http://www2.physics.umd.edu/~yakovenk/econophysics.html
[4]	A. Dragulescu, V.M. Yakovenko, “Statistical mechanics of money”, Eur. Phys. J. B 17, 723-729 (2000).
[5]	A.Dragulescu, V.M. Yakovenko, “Evidence for the exponential distribution of income in the USA”, Eur. Phys. J. B 20, 585-589 (2001)
[6]	A. C. Silva, V. M. Yakovenko, “Temporal evolution of the “thermal” and “superthermal” income classes in the USA during 1983–2001”, Europhys. Lett., 69 (2), pp. 304–310 (2005)
[7]	K. E. Kurten and F. V. Kusmartsev, “Bose-Einstein distribution of money in a free-market economy”. Physics Letter A Journal, EPL, 93 (2011) 28003
[8]	F. V. Kusmartsev, “Statistical mechanics of economics”, Physics Letters A 375 (2011) 966–973
[9]	F. Clementi, M. Gallegati, "Power Law Tails in the Italian Personal Income Distribution", Physica A, volume 350, pages 427–438, 2005.
[10]	E. Oltean, F.V. Kusmartsev, “A polynomial distribution applied to income and wealth distribution”, Journal of Knowledge Management, Economics, and Information Technology, 2013, Bucharest, Roma-nia
[11]	URL:http://www.investopedia.com/terms/r/realincome.asp#axzz2J6oHpvFu
[12]	URL:http://www.ons.gov.uk/ons/search/index.html?newquery=household+income+by+decile&newoffset=0&pageSize=50&sortBy=&applyFilters=true.

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APA Style

Elvis Oltean, Fedor V. Kusmartsev. (2014). An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK. American Journal of Physics and Applications, 2(3), 73-77. https://doi.org/10.11648/j.ajpa.20140203.11

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ACS Style

Elvis Oltean; Fedor V. Kusmartsev. An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK. Am. J. Phys. Appl. 2014, 2(3), 73-77. doi: 10.11648/j.ajpa.20140203.11

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AMA Style

Elvis Oltean, Fedor V. Kusmartsev. An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK. Am J Phys Appl. 2014;2(3):73-77. doi: 10.11648/j.ajpa.20140203.11

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@article{10.11648/j.ajpa.20140203.11,
  author = {Elvis Oltean and Fedor V. Kusmartsev},
  title = {An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK},
  journal = {American Journal of Physics and Applications},
  volume = {2},
  number = {3},
  pages = {73-77},
  doi = {10.11648/j.ajpa.20140203.11},
  url = {https://doi.org/10.11648/j.ajpa.20140203.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajpa.20140203.11},
  abstract = {We extend the exploration regarding dynamic approach of macroeconomic variables by tackling systematically expenditure using Statistical Physics models (for the first time to the best of our knowledge). Also, using polynomial distribution which characterizes the behavior of dynamic systems in certain situations, we extend also our analysis to mean income data from the UK that span for a time interval of 35 years. We find that most of the values for coefficient of determination obtained from fitting the data from consecutive years analysis to be above 80%. We used for our analysis first degree polynomial, but higher degree polynomials and longer time intervals between the years considered can dramatically increase goodness of the fit. As this methodology was applied successfully to income and wealth, we can conclude that macroeconomic systems can be treated similarly to dynamic systems from Physics. Subsequently, the analysis could be extended to other macroeconomic indicators.},
 year = {2014}
}

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TY  - JOUR
T1  - An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK
AU  - Elvis Oltean
AU  - Fedor V. Kusmartsev
Y1  - 2014/05/20
PY  - 2014
N1  - https://doi.org/10.11648/j.ajpa.20140203.11
DO  - 10.11648/j.ajpa.20140203.11
T2  - American Journal of Physics and Applications
JF  - American Journal of Physics and Applications
JO  - American Journal of Physics and Applications
SP  - 73
EP  - 77
PB  - Science Publishing Group
SN  - 2330-4308
UR  - https://doi.org/10.11648/j.ajpa.20140203.11
AB  - We extend the exploration regarding dynamic approach of macroeconomic variables by tackling systematically expenditure using Statistical Physics models (for the first time to the best of our knowledge). Also, using polynomial distribution which characterizes the behavior of dynamic systems in certain situations, we extend also our analysis to mean income data from the UK that span for a time interval of 35 years. We find that most of the values for coefficient of determination obtained from fitting the data from consecutive years analysis to be above 80%. We used for our analysis first degree polynomial, but higher degree polynomials and longer time intervals between the years considered can dramatically increase goodness of the fit. As this methodology was applied successfully to income and wealth, we can conclude that macroeconomic systems can be treated similarly to dynamic systems from Physics. Subsequently, the analysis could be extended to other macroeconomic indicators.
VL  - 2
IS  - 3
ER  -

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Author Information

Elvis Oltean

Department of Physics, Loughborough University, Loughborough, the UK
Fedor V. Kusmartsev

Department of Physics, Loughborough University, Loughborough, the UK

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APA Style

Elvis Oltean, Fedor V. Kusmartsev. (2014). An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK. American Journal of Physics and Applications, 2(3), 73-77. https://doi.org/10.11648/j.ajpa.20140203.11

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ACS Style

Elvis Oltean; Fedor V. Kusmartsev. An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK. Am. J. Phys. Appl. 2014, 2(3), 73-77. doi: 10.11648/j.ajpa.20140203.11

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AMA Style

Elvis Oltean, Fedor V. Kusmartsev. An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK. Am J Phys Appl. 2014;2(3):73-77. doi: 10.11648/j.ajpa.20140203.11

Copy | Download

@article{10.11648/j.ajpa.20140203.11,
  author = {Elvis Oltean and Fedor V. Kusmartsev},
  title = {An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK},
  journal = {American Journal of Physics and Applications},
  volume = {2},
  number = {3},
  pages = {73-77},
  doi = {10.11648/j.ajpa.20140203.11},
  url = {https://doi.org/10.11648/j.ajpa.20140203.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ajpa.20140203.11},
  abstract = {We extend the exploration regarding dynamic approach of macroeconomic variables by tackling systematically expenditure using Statistical Physics models (for the first time to the best of our knowledge). Also, using polynomial distribution which characterizes the behavior of dynamic systems in certain situations, we extend also our analysis to mean income data from the UK that span for a time interval of 35 years. We find that most of the values for coefficient of determination obtained from fitting the data from consecutive years analysis to be above 80%. We used for our analysis first degree polynomial, but higher degree polynomials and longer time intervals between the years considered can dramatically increase goodness of the fit. As this methodology was applied successfully to income and wealth, we can conclude that macroeconomic systems can be treated similarly to dynamic systems from Physics. Subsequently, the analysis could be extended to other macroeconomic indicators.},
 year = {2014}
}

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TY  - JOUR
T1  - An Econophysical Dynamic Approach of Expenditure and Income Distribution in the UK
AU  - Elvis Oltean
AU  - Fedor V. Kusmartsev
Y1  - 2014/05/20
PY  - 2014
N1  - https://doi.org/10.11648/j.ajpa.20140203.11
DO  - 10.11648/j.ajpa.20140203.11
T2  - American Journal of Physics and Applications
JF  - American Journal of Physics and Applications
JO  - American Journal of Physics and Applications
SP  - 73
EP  - 77
PB  - Science Publishing Group
SN  - 2330-4308
UR  - https://doi.org/10.11648/j.ajpa.20140203.11
AB  - We extend the exploration regarding dynamic approach of macroeconomic variables by tackling systematically expenditure using Statistical Physics models (for the first time to the best of our knowledge). Also, using polynomial distribution which characterizes the behavior of dynamic systems in certain situations, we extend also our analysis to mean income data from the UK that span for a time interval of 35 years. We find that most of the values for coefficient of determination obtained from fitting the data from consecutive years analysis to be above 80%. We used for our analysis first degree polynomial, but higher degree polynomials and longer time intervals between the years considered can dramatically increase goodness of the fit. As this methodology was applied successfully to income and wealth, we can conclude that macroeconomic systems can be treated similarly to dynamic systems from Physics. Subsequently, the analysis could be extended to other macroeconomic indicators.
VL  - 2
IS  - 3
ER  -

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