2004/06/30 by A. Christian Silva, Victor M. Yakovenko, Victor M Yakovenko · 1 citation
Economics, Econometrics and Finance · Physics and Astronomy · #Class (philosophy) #Complex Systems and Time Series Analysis #Economic and Technological Innovation #Income distribution #Inequality #Pareto principle #Personal income #Population #Statistical Mechanics and Entropy #Stock (firearms) #cond-mat.other #q-fin.GN
paper · pdf · doi:10.1209/epl/i2004-10330-3
published as Europhys. Lett., 69 (2), pp. 304-310 (2005) · v.3: 7 pages, 5 figures, EPL style, more references added
arxiv created 2004/10/31 · openalex publication_date 2005/01/01 · arxiv updated 2009/12/01 · openalex created_date 2016/06/24 · openalex updated_date 2026/08/05
Personal income distribution in the USA has a well-defined two-class structure. The majority of population (97–99%) belongs to the lower class characterized by the exponential Boltzmann-Gibbs ("thermal") distribution, whereas the upper class (1–3% of the population) has a Pareto power law ("superthermal") distribution. By analyzing income data for 1983–2001, we show that the "thermal" part is stationary in time, save for a gradual increase of the effective temperature, whereas the "superthermal" tail swells and shrinks following the stock market. We discuss the concept of equilibrium inequality in a society, based on the principle of maximal entropy, and quantitatively show that it applies to the majority of population.