Abstract
Empirical distributions of wealth and income can be reproduced using simplified agent-based models of economic interactions, analogous to microscopic collisions of gas particles. Building upon these models of freely interacting agents, we explore the effect of a segregated economic network in which interactions are restricted to those between agents of similar wealth. Agents on a 2D lattice undergo kinetic exchanges with their nearest neighbours, while continuously switching places to minimize local wealth differences. A spatial concentration of wealth leads to a steady state with increased global inequality and a magnified distinction between local and global measures of combatting poverty. Individual saving propensity proves ineffective in the segregated economy, while redistributive taxation transcends the spatial inhomogeneity and greatly reduces inequality. Adding fluctuations to the segregation dynamics, we observe a sharp phase transition to lower inequality at a critical temperature, accompanied by a sudden change in the distribution of the wealthy elite.
Graphical abstract
Similar content being viewed by others
References
J.E. Stiglitz,The Price of Inequality: How Today’s Divided Society Endangers Our Future (W.W. Norton, 2013)
T. Piketty,Capital in the Twenty-First Century (Harvard University Press, 2014) [original title: Le Capital au XXIe Siècle]
P.A. Samuelson, W.D. Nordhaus,Economics (McGraw-Hill, 2010)
K.M. Neckerman, F. Torche, Annu. Rev. Sociol. 33, 335 (2007)
V. Pareto,Cours d’Économie Politique (F. Rouge, 1897)
A. Drăgulescu, V.M. Yakovenko, Physica A 299, 213 (2001)
O.S. Klass, O. Biham, M. Levy, O. Malcai, S. Solomon, Econ. Lett. 90, 290 (2006)
A.Y. Abul-Magd, Phys. Rev. E 66, (2002)
W. Souma, Fractals 9, 463 (2001)
Y. Tao, X. Wu, T. Zhou, W. Yan, Y. Huang, H. Yu, B. Mondal, V.M. Yakovenko, J. Econ. Interact. Coord. 14, 345 (2019)
F. Clementi, M. Gallegati, inEconophysics of Wealth Distributions (Springer-Verlag, 2005), pp. 3–14
Eurostat,European union statistics on income and living conditions (EU-SILC) (2020), [Online, consulted January 3 2020], https://ec.europa.eu/eurostat/web/microdata/european-union-statistics-on-income-and-living-conditions
A. Drăgulescu, V.M. Yakovenko, Eur. Phys. J. B 20, 585 (2001)
Algemene Directie Statistiek – Statistics Belgium (Statbel),Fiscale inkomens (2018), [Online, consulted March 30 2019], https://statbel.fgov.be/nl/themas/huishoudens/fiscale-inkomens
M. McPherson, L. Smith-Lovin, J.M. Cook, Annu. Rev. Sociol. 27, 415 (2001)
D.S. Massey, Demography 33, 395 (1996)
T.C. Schelling, J. Math. Sociol. 1, 143 (1971)
R. Pancs, N.J. Vriend, J. Publ. Econ. 91, 1 (2007)
D. Vinković, A. Kirman, Proc. Natl. Acad. Sci. USA 103, 19261 (2006)
D. Stauffer, S. Solomon, Eur. Phys. J. B 57, 473 (2007)
L. Dall’Asta, C. Castellano, M. Marsili, J. Stat. Mech.: Theory Exp. 2008, L07002 (2008)
L. Gauvin, J. Vannimenus, J.P. Nadal, Eur. Phys. J. B 70, 293 (2009)
A. Chatterjee, B.K. Chakrabarti, Eur. Phys. J. B 60, 135 (2007)
V.M. Yakovenko, J.B. Rosser, Rev. Mod. Phys. 81, 1703 (2009)
J.P. Bouchaud, M. Mézard, Physica A 282, 536 (2000)
C.F. Moukarzel, S. Gonçalves, J.R. Iglesias, M. Rodríguez-Achach, R. Huerta-Quintanilla, Eur. Phys. J. Special Topics 143, 75 (2007)
A. Chakraborti, B. Chakrabarti, Eur. Phys. J. B 17, 167 (2000)
M. Patriarca, A. Chakraborti, K. Kaski, Phys. Rev. E 70, 016104 (2004)
A. Chatterjee, B.K. Chakrabarti, S. Manna, Physica A 335, 155 (2004)
M. Patriarca, A. Chakraborti, K. Kaski, G. Germano, inEconophysics of Wealth Distributions (Springer-Verlag, 2005), pp. 93–110
A. Drăgulescu, V.M. Yakovenko, Eur. Phys. J. B 17, 723 (2000)
S. Guala, INDECS 7, 1 (2009)
J. Iglesias, Sci. Cult. (India) 76, 437 (2010)
P.M.C. de Oliveira, Europhys. Lett. 119, 40007 (2017)
A. Sahasranaman, H.J. Jensen, PLoS ONE 11, 1 (2016)
S. Benard, R. Willer, J. Math. Sociol. 31, 149 (2007)
M. Pangallo, J.P. Nadal, A. Vignes, J. Econ. Behav. Organ. 159, 15 (2019)
R. Louf, M. Barthelemy, PLoS ONE 11, 1 (2016)
K. Kawasaki, Phys. Rev. 145, 224 (1966)
R. Benabou, E.A. Ok, Q. J. Econ. 116, 447 (2001)
B.K. Chakrabarti, A. Chatterjee, S. Yarlagadda,Econophysics of Wealth Distributions (Springer-Verlag, 2005)
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Fernandes, L., Tempere, J. Effect of segregation on inequality in kinetic models of wealth exchange. Eur. Phys. J. B 93, 37 (2020). https://doi.org/10.1140/epjb/e2020-100534-7
Received:
Revised:
Published:
DOI: https://doi.org/10.1140/epjb/e2020-100534-7