Pareto law and Pareto index in the income distribution of Japanese companies

In order to study the phenomenon in detail that income distribution follows Pareto law, we analyze the database of high income companies in Japan. We find a quantitative relation between the average capital of the companies and the Pareto index. The larger the average capital becomes, the smaller the Pareto index becomes. From this relation, we can possibly explain that the Pareto index of company income distribution hardly changes, while the Pareto index of personal income distribution changes sharply, from a viewpoint of capital (or means). We also find a quantitative relation between the lower bound of capital and the typical scale at which Pareto law breaks. The larger the lower bound of capital becomes, the larger the typical scale becomes. From this result, the reason there is a (no) typical scale at which Pareto law breaks in the income distribution can be understood through (no) constraint, such as the lower bound of capital or means of companies, in the financial system.Comment: 12 pages, 8 figure

Relations between a typical scale and averages in the breaking of fractal distribution

We study distributions which have both fractal and non-fractal scale regions by introducing a typical scale into a scale invariant system. As one of models in which distributions follow power law in the large scale region and deviate further from the power law in the smaller scale region, we employ 2-dim quantum gravity modified by the $R^2$ term. As examples of distributions in the real world which have similar property to this model, we consider those of personal income in Japan over latest twenty fiscal years. We find relations between the typical scale and several kinds of averages in this model, and observe that these relations are also valid in recent personal income distributions in Japan with sufficient accuracy. We show the existence of the fiscal years so called bubble term in which the gap has arisen in power law, by observing that the data are away from one of these relations. We confirm, therefore, that the distribution of this model has close similarity to those of personal income. In addition, we can estimate the value of Pareto index and whether a big gap exists in power law by using only these relations. As a result, we point out that the typical scale is an useful concept different from average value and that the distribution function derived in this model is an effective tool to investigate these kinds of distributions.Comment: 17 pages, latex, 13 eps figure