Wealth distribution in modern and medieval societies

M.A. Santos1, R. Coelho2, G. Hegyi3,4, Z. Néda3 and J.J. Ramasco5
1Departamento de Fisica and Centro de Fisica do Porto, Universidade do Porto, Porto Portugal
2School of Physics, Trinity College, Dublin, Ireland
3Department of Physics, Babes-Bolyai University, Cluj-Napoca, Romania
4Department of History and Philosophy, Babes-Bolyai University, Cluj-Napoca, Romania
5Physics Department, Emory University, Atlanta GA 30322, USA.

(September 2006)

The power-law form of the upper part of the distribution of individual wealth/income (Pareto's law) is very well established for many countries and years. The Pareto index is however non-universal, varying typically from 1.5 to around 3. A recently introduced model for wealth exchange on an evolving family-network [Physica A 353, 515 (2005)] is reviewed and compared with empirical data. While the model mimics very well recent individual wealth data in a modern society (U.K.), it fails to explain results for a feudal society, based on the number of serf families owned by nobles (Hungary, mid XVI century). The unusually low (around 1) Pareto index found in this case is not compatible with the previous model. It is suggested that this fact may be interpreted as a result of the absence of active trading among agents.