Friday, March 11, 2005

Why it is hard to share the wealth

New Scientist article:

"Pareto showed that the distribution of wealth in Europe followed a simple power-law pattern, which essentially meant that the extremely rich hogged most of a nation's wealth." The Pareto Power law works for the highest income levels in many countries, with different parameters for different countries.

The exponential Boltzmann-Gibbs distribution has been shown to describe the distribution of wealth for the bottom 97 to 99 percent of the U.S. population. That function was developed in the context of describing the distribution of energies of particles in a gas. Its utility in describing wealth in a population is interpreted to suggest that wealth is determined by random processes of interactions among people. Further implications are that wealth distribution may be quite difficult to modify for the majority of the population within any society.

No comments: