The Black Swan: The Impact of the Highly Improbable · chapter 2 · id the-black-swan-c2-07-wealth-distribution-follows-ex
“Wealth distribution follows Extremistan dynamics -- the Pareto principle (80/20 rule) shows that a small fraction of the population controls a disproportionate share of total wealth, and a single individual can distort the average of any group.”
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Receipts
Gabaix (2009), 'Power Laws in Economics and Finance', Annual Review of Economicssource alive
Power laws describe the distributions of income and wealth reasonably well, at least in the upper tail. The top 1% of earners capture a disproportionate share of national income.
Forbes Real-Time Billionaires Listsource alive
The wealth distribution is empirically extreme: the top 10 individuals hold more wealth than the bottom billions of people combined.
Clauset, Shalizi & Newman (2009), 'Power-Law Distributions in Empirical Data', SIAM ReviewDOI registry: valid
Many empirical phenomena claimed to follow power laws are better fit by alternative distributions when rigorous statistical testing is applied. However, wealth and income distributions consistently show heavy-tailed behavior.
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