Abstract
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 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.
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Yakovenko, V.M., Silva, A.C. (2005). Two-class Structure of Income Distribution in the USA: Exponential Bulk and Power-law Tail. In: Chatterjee, A., Yarlagadda, S., Chakrabarti, B.K. (eds) Econophysics of Wealth Distributions. New Economic Windows. Springer, Milano. https://doi.org/10.1007/88-470-0389-X_2
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DOI: https://doi.org/10.1007/88-470-0389-X_2
Publisher Name: Springer, Milano
Print ISBN: 978-88-470-0329-3
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