Re: power law distribution of capitalist income

From: Ian Wright (ian_paul_wright@HOTMAIL.COM)
Date: Fri Jun 13 2003 - 00:45:42 EDT

Hello Paul,

Dragulescu & Yakovenko refer to IRS data for individual income in
the USA in 1997 in a preprint of theirs ("Statistical mechanics of
money, income and wealth: a short survey"). I think the data can
be downloaded from They notice
that the income PDF changes for very high incomes above
100k$/year to a Pareto power law (they claim that for the rest
of the distribution the data fits an exponential law, but I think
this may be hasty). More generally, since Pareto it's been
recognised that a power law provides a good fit for the
distribution of high incomes, but a poor fit for the whole range.

My interpretation is that it is significant that the distribution of
high incomes has a different functional form to the vast majority
of incomes. My guess is that it corresponds to the two major forms
of income in capitalism: wage-labour and profits.


Add photos to your messages with MSN 8. Get 2 months FREE*.

This archive was generated by hypermail 2.1.5 : Sat Jun 14 2003 - 00:00:00 EDT