Wealth Inequality in America

Dienstag, 22. Oktober 2013 - 14:29

This is about the Wealth Inequality in America Video. It is based on research by Michael I. Norton and Dan Ariely:

Building a Better America−−One Wealth Quintile at a Time
Michael I. Norton and Dan Ariely
Perspectives on Psychological Science 2011 6: 9
DOI: 10.1177/1745691610393524

The interesting issue in this research is that not only actual data had been presented, but also estimations and ideal distributions in the view of the public. I didn’t dig into the details, but from the graphs I computed three inequality measures.

Gini indices:

Here we should not confuse the distributions of incomes and wealth. The actual data above are about wealth. As for the estimation, I fear, that people thought about income distribution, not about the wealth distribution. I guess, that the Gini for income distribution in the US also is around 50%. For Germany it is slightly above 40% for incomes and above 70% for wealth. Such wealth distributions may cause unrest, but that applies to Europe as much as it applies to the US.

As for what people think about an ideal distribution, also this might refer to incomes. Could information theory explain, why a Gini between 20% and 30% is “ideal” for many people?

By the way: If everybody would have the same income and everybody could save a bit from that income, the wealth of an individual would grow. That is, in such a scenario also an even income distribution would lead to an unequal wealth distribution.

See also: Wealth, Income, and Power by G. William Domhoff

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