I've heard of this before:
Income is distributed according to a Pareto distribution with index a > 1, but I came across it again in my reading of Antifragile by Nassim Taleb (highly recommend).
Two things struck me this time:
1) Half the population controls only 1 part per 100 of the wealth.
2) 20% of 20% of 20% is the 1 percent all the Occupy fuss was about (not that I disagree with the fuss, just that I didn't connect 80-20 to the 1 percent)
The 80-20 rule. :
20% of the people control 80% of the total wealth.
20% of those people, or 4% of the population, control 64% of the total wealth.
20% of those people, or 0.8% of the population, control 51.2% of the total wealth. The 1 percent.
Likewise, 64% of the population controls only 4% of the total wealth.
And 51.2% of the population controls only 0.8% of the total wealth.
"You might expect the balance between the rich and the poor to vary widely from country to country. Different nations, after all, have different resources and produce different kinds of products. Some rely on agriculture, others on heavy industry, still others on high technology. And their peoples have different backgrounds, skills, and levels of education. But in 1897, an Italian engineer-turned-economist named Vilfredo Pareto discovered a pattern in the distribution of wealth that appears to be every bit as universal as the laws of thermodynamics or chemistry."
http://hbr.org/2002/04/wealth-happens/ar/1
Income is distributed according to a Pareto distribution with index a > 1, but I came across it again in my reading of Antifragile by Nassim Taleb (highly recommend).
Two things struck me this time:
1) Half the population controls only 1 part per 100 of the wealth.
2) 20% of 20% of 20% is the 1 percent all the Occupy fuss was about (not that I disagree with the fuss, just that I didn't connect 80-20 to the 1 percent)
The 80-20 rule. :
20% of the people control 80% of the total wealth.
20% of those people, or 4% of the population, control 64% of the total wealth.
20% of those people, or 0.8% of the population, control 51.2% of the total wealth. The 1 percent.
Likewise, 64% of the population controls only 4% of the total wealth.
And 51.2% of the population controls only 0.8% of the total wealth.
"You might expect the balance between the rich and the poor to vary widely from country to country. Different nations, after all, have different resources and produce different kinds of products. Some rely on agriculture, others on heavy industry, still others on high technology. And their peoples have different backgrounds, skills, and levels of education. But in 1897, an Italian engineer-turned-economist named Vilfredo Pareto discovered a pattern in the distribution of wealth that appears to be every bit as universal as the laws of thermodynamics or chemistry."
http://hbr.org/2002/04/wealth-happens/ar/1
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