Temporal evolution of the "thermal" and "superthermal" income classes in the USA during 1983-2001

Details Temporal evolution of the "thermal" and "superthermal" income classes in the USA during 1983-2001 Temporal evolution of the "thermal" and "superthermal" income classes in the USA during 1983-2001

2004-06-17

arxiv.org/abs/cond-mat/0406385v3

Europhys. Lett., 69 (2), pp. 304-310 (2005)

Physics

Condensed Matter

Other Condensed Matter

v.3: 7 pages, 5 figures, EPL style, more references added

Scientific paper

10.1209/epl/i2004-10330-3

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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