ECON: Rich get richer ?

Alexander 'Sasha' Chislenko (
Thu, 10 Dec 1998 16:46:28 -0500

There are different ways of calculating whether rich get richer, or poor get poorer. One can look at people who fit into a certain percentile last year, and see how they are doing last year (as far as I know, according to this statistic, last year's top 10% get a bit poorer, while last year's bottom 10% get a bit richer. The usual statistic here though is to look at how well the top [bottom] N% of the population did last year, and how the top [bottom] N% of the population do today. But these are different people! Sure, this still means that there may be growing differentiation of incomes, but this is exactly because yesterdays not-the-richest are becoming richer than the yesterday's richest. It is also possible for everybody to be getting richer all the time, while the society is getting poorer. Consider wealth function for an individual by calendar year:

Wealth = Const + Age*100 - Year*99

And then, there are different types of occupations and ways of counting wealth, different percentiles one can take into account, the fact that the greatest riches of the civilization - knowledge, arts, music, etc. are becoming increasingly democratically accessible, etc., etc.

The statistics are usually not trying to illustrate the meaning of the process, but gain supporters for political campaigns, with both people running and people voting for them interested in their own little power games more than social engineering.

Alexander Chislenko <> <> <> <>