3 ms·
Almost all articles of the form "X% of the Y is held by the top Z%" where X > Z leave off one important thing: what % of Y should be held by the top Z%? One's
by tzs 3y ago
Almost all articles of the form "X% of the Y is held by the top Z%" where X > Z leave off one important thing: what % of Y should be held by the top Z%?
One's first though might be that in a truly equitable society, we'd have X = Z for all Z. E.g., the top 10% have 10% of Y, the top 20% have 20% of Y, and so on.
But upon a few moments more thought one will realize that is only mathematically possible if everyone has the same amount. If Y is stock owned by households, for example, such equitability in ownership can only happen if every household has the same amount of stock.
The moment even a single household ends up with either more or less stock than a single other household, then the % held by the top Z% will be >Z%.
This is true for anything, not just financial things. E.g., the top 10% of the winners of the Best Album of the Year Grammy Award have won more than 10% of the Best Album Grammy Awards. The top 10% of pimps manage more than 10% of the whores who work for pimps. The top 10% of pizza sellers by sales sell more than 10% of all pizza sold. The top 10% of muggers are responsible for more than 10% of muggings.
- wyre 3y agoI’d say Pareto Distribution is a good goal to start with the top 20% holding 80% of the wealth.
- ericpauley 3y ago80:20 is simply one parameterization of the Pareto distribution; there's nothing fundamental that implies it ought to be.