Sunday, January 15, 2012

"Old Money Goes Broke"

From Overcoming Bias:
My last post talked about inequality among sand grains, diamonds, firms, and cities. Specifically, that their sizes are distributed like lognormals, but with thicker power law tails. I noted that firms and cities are distributed quite unequally, with a (Zipf’s law) upper tail power near one.

In this post I’ll focus on wealth. In the 1890s Pareto found that the (upper tail of) wealth and income are distributed as power laws. Recent studies of US and world rich folks

estimate powers of 1.3 to 1.5, similar to Pareto’s original findings. This distributes individual wealth more equally than firm and city sizes....MORE
The comments are interesting, especially the one that leads to:
Econophysics Research in Victor Yakovenko's group Always remembering that the economics/physics nexus is only a model and should be treated with all the wariness that models deserve.