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

A. Christian Silva and Victor Yakovenko

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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.

Date: 2004-06, Revised 2004-10
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Citations: View citations in EconPapers (12)

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

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