Download Column 2: Normal Distribution and Power

●Self-evaluation of Japanese consumers on their consumption knowledge is low in
comparison with that of Norwegian consumers. Between Japanese and Norwegians, there is
a big difference in the level of consumer competence in relation to the economy and finance
(e.g. interest rates) and to the environment and ethics (e.g. eco-friendly consumption).
Fig 2-3-11
（%）
100
Self-evaluation of Japanese consumers on their consumer knowledge is low
（１）
Japan
4
9
90
80
70
4
5
7
10
21
9
19
22
32
35
Very poorly
51
37
33
Poorly
45
Average
60
50
40
30
58
55
58
46
50
44
35
20
10
14
8
3
0
3
od
s
te
80
（２）
Norway
9
11
17
16
15
25
33
26
50
40
30
2
3
3
13
16
16
22
18
21
23
17
2 2
11
28
22
28
27
27
17
12
0
Very well
Power-law distribution
Poorly
The mean value
20
22
21
14
8
14
12
12
6
Average
Normal distribution
Well
Very well
pr
es
at
tr
es
od
ts
uc
od
pr
ic
an
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rg
O
uc
od
pr
de
tra
ir
Fa
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on
ph
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Te
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ci
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El
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nm
tio
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vi dly mp
En en u
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In m
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Fo
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In
（Notes）
1．
（１）
Japanese data is compiled from the Cabinet Office "National Survey on Lifestyle Peferences" (2008). 4164
people between the age of 15 to 79 responded.
（２）
Norwegian data is compiled from Berg.L.(2007)"Competent consumers? Consumer competence profiles in
Norway".International Journal of Consumer Studies,31, 418-427. The number of samples is 1034.
2．
Respondents were asked the following question; "How well would you say are you familiar with following things; Ａ
：
Interest rate, Ｂ
：Food prices,Ｃ：Insurance prices,Ｄ：Environmentally friendly consumption, Ｅ
：Electricity prices, Ｆ
：
Telephone prices, Ｇ：Fair trade products, Ｈ：Organic products" The percentage of each answer (１
：Very well, ２
：Well,
３
：Average, ４
：Poorly, ５
：Very poorly) is shown in the graph.
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Normal distribution is the state in which variability of sample data points is similarly
distributed before and after the mean value. The graph will show a bell-shaped curve
that is symmetrical with the highest center at the mean value. In other words, more
sample data is present around the mean value, which decreases as the value moves
toward the left and right edges of the curve.
On the other hand, power-law distribution has more sample data with extreme value
than normal distribution, drawing a curve with a long tail lowering as the value
increases.
Normal distribution is considered the most basic form of statistics. In fact, most mathematical models in economics have employed this normal distribution, which has been
invented in the field of natural science. However, recent results of econophysics
indicate that many economic phenomena follow power-law distribution rather than
normal distribution. For example, distribution of income or net assets and transition of
stock prices have been known to follow power-law distribution rather than normal.
Power-law distribution is just one of many probability distributions, but it is considered a valuable tool to assess uncertainty issues that normal distribution cannot
handle when they occur at a certain probability.
Very poorly
28
30
23
30
21
Well
Normal Distribution and Power-Law Distribution
43
29
20
10
7
18
70
60
16
15
2
es
ra
ic
pr
st
re
90
2
9
ts
uc
od
pr
ic
an
ts
rg
O
uc
od
pr
de
tra
ir
Fa
es
ic
pr
e
on
ph
le
Te
es
ic
pr
ty
ci
tri
ec
El
lly
ta
en
n
nm
tio
ro
vi dly mp
En en u
fri ns
co
e
nc
ra m
su iu
In rem
p
Fo
te
In
（%）
100
8
C o l u m n
The mean value
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