Examination of the Relationship between Disparity and Stock Related to Social Sustainability and the Case Studies

Research Topic
Examination of the relationship between disparity and stock related to social sustainability and the case studies

Lead Researcher
Takeshi Kato, Program-Specific Associate Professor, Hitachi Kyoto University Laboratory

Joint Researcher

Yoshinori Hiroi, Professor, Kokoro Research Center, Kyoto University

Income and regional disparities have become social problems in various countries around the world. Regarding this issue, empirical power laws, such as Pareto’s law for the distribution of income and Zipf’s law for the distribution of population by city size or economic scale, have become well-known in economics. In econophysics, an asset exchange model based on the analogy of kinetic energy exchange in an ideal gas has been proposed. In this model, exponential, power, and delta distributions appear depending on parameters such as the amount of exchange between the wealthy and the poor, the distribution ratio after such exchange, and the savings rate. These distribution shapes and disparities have mainly been examined until now.

The purpose of this project is to examine the relationship between the savings rate, the total amount of exchange, and the Gini index, based on a newly proposed asset exchange model. As the savings rate (stock) increases, the total amount of exchange (flow) and the Gini index (disparity) are expected to decrease. In addition, as the contribution rate of the surplus stock of the wealthy increases, flow is expected to increase and disparity to decrease.

This project will first verify these predictions through simulations, and then will focus on the trade-off between market activation and disparity, and the relationship between the surplus stock of the wealthy and disparity. Furthermore, based on these results, if we find that it is necessary to utilize surplus stock while keeping disparity at an acceptable level in order to solve the disparity problem, we will aim to make recommendations for social concepts and policies while referring to actual case studies: the utilization of stock in abandoned farmland (vacant lots) and shuttered streets (vacant stores), both of which are related to the sustainability of local communities.

2021/07/01