L-stable model for the distribution of income

Abstract

This paper introduces a new model for the distribution of income, and hopes to draw attention to the great potential of the "L-stable" family of nonGaussian probability distributions. This new tool may be as important as the specific application to be discussed. In other words, the same approach translates immediately to analogous quantities for which it may be more reasonable, or give a better fit. One might even paraphrase Einstein's cagey comment about Brownian motion: it is pos- sible that the properties studied in that paper are identical to those of income; however, the information available regarding incomes is so lacking in precision that one cannot really form a judgement on the matter.