In economics, what variables do we usually assume to follow an exponential distribution? I would like as many examples as possible, and it would be great if you have a rationale(economic reason or economic theory) for making the exponential distribution assumption in your example. Thanks!

  • 1
    $\begingroup$ I think this is a bit broad exponential distribution is extremely popular in economics. Too broad questions are off topic according to our help center consider it narrowing down to either some field or topic, otherwise this could be closed down $\endgroup$
    – 1muflon1
    Jul 21 at 8:02
  • $\begingroup$ @T34driver: I assume you referring to stochastic variables, i.e. shocks? $\endgroup$
    – BrsG
    Jul 21 at 8:36
  • $\begingroup$ @BrsG Thanks you! Yes, I meant random/stochastic variables. $\endgroup$
    – T34driver
    Jul 22 at 2:42
  • $\begingroup$ @1muflon1 Thanks! I'm writing course materials for a course on statistics for economists, and would like to give some economic motivations for important distributions. $\endgroup$
    – T34driver
    Jul 22 at 2:44
  • $\begingroup$ @T34driver then maybe consider changing it to important/most important applications $\endgroup$
    – 1muflon1
    Jul 22 at 8:30

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