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

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.

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

References in corpus (3)

• Money in Gas-Like Markets: Gibbs and Pareto Laws
• Wealth distribution in an ancient Egyptian society
• The statistical distribution of money and the rate of money transference

Cited by in corpus (38)

• Colloquium: Statistical mechanics of money, wealth, and income
• A study of the personal income distribution in Australia
• Do wealth distributions follow power laws? Evidence from "rich lists"
• k-Generalized Statistics in Personal Income Distribution
• The k-generalized distribution: A new descriptive model for the size distribution of incomes
• Global inequality in energy consumption from 1980 to 2010
• Exponential Structure of Income Inequality: Evidence from 67 Countries
• Evidence for the Gompertz Curve in the Income Distribution of Brazil 1978-2005
• Monetary economics from econophysics perspective
• Evidence for criticality in financial data
• How Required Reserve Ratio Affects Distribution and Velocity of Money
• Behavioral and Network Origins of Wealth Inequality: Insights from a Virtual World
• Income distribution patterns from a complete social security database
• The uniqueness of company size distribution function from tent-shaped growth rate distribution
• Physics-inspired analysis of the two-class income distribution in the USA in 1983-2018
• Revisiting the thermal and superthermal two-class distribution of incomes: A critical perspective
• Kinetic models for wealth exchange on directed networks
• Agent dynamics in kinetic models of wealth exchange
• Scaling in Income Inequalities and its Dynamical Origin
• Conservation laws, financial entropy and the Eurozone crisis
• Modeling wealth distribution in growing markets
• Common Origin of Power-law Tails in Income Distributions and Relativistic Gases
• Agent based models for wealth distribution with preference in interaction
• Evolutionary Model of the Growth and Size of Firms
• Income Distribution in the European Union Versus in the United States
• Antipersistent dynamics in kinetic models of wealth exchange
• A poor agent and subsidy: an investigation through CCM model
• Consequences of increased longevity for wealth, fertility, and population growth
• Stochastic Effects in a Discretized Kinetic Model of Economic Exchange
• Size-Dependency of Income Distributions and Its Implications
• Directed Random Markets: Connectivity determines Money
• A mechanism to derive multi-power law functions: an application in the econophysics framework
• Transition from Exponential to Power Law Distributions in a Chaotic Market
• Econophysics, Statistical Mechanics Approach to
• An equilibrium-conserving taxation scheme for income from capital
• Optimal Income Crossover for Two-Class Model Using Particle Swarm Optimization
• Evolutionary Model of the Personal Income Distribution
• A New Model for the Income Distribution