The stochastic interpretation of the Dagum personal income distribution: a tale

Abstract

The present notes delineates the circumstances and the basic theoretical steps which led, about thirty years ago, to the derivation of the Dagum income distribution as the equilibrium distribution of a diffusion process. Most of theoretical issues of this note deal with the derivation of the stable solution for the forward Kolmogorov equation. Such a derivation has socio-economic fundaments from the contributions of Sylos Labini on social stratification.