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

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  • A. Christian Silva
  • Victor M. Yakovenko

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.

Suggested Citation

  • A. Christian Silva & Victor M. Yakovenko, 2004. "Temporal evolution of the "thermal" and "superthermal" income classes in the USA during 1983-2001," Papers cond-mat/0406385, arXiv.org, revised Oct 2004.
    • Handle: RePEc:arx:papers:cond-mat/0406385
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    Cited by:

    1. Anwar Shaikh & Amr Ragab, 2023. "Some universal patterns in income distribution: An econophysics approach," Metroeconomica, Wiley Blackwell, vol. 74(1), pages 248-264, February.
    2. Shaikh, Anwar & Jacobo, Juan Esteban, 2020. "Economic Arbitrage and the Econophysics of Income Inequality," Review of Behavioral Economics, now publishers, vol. 7(4), pages 299–315-2, December.
    3. Blair Fix, 2018. "Hierarchy and the power-law income distribution tail," Journal of Computational Social Science, Springer, vol. 1(2), pages 471-491, September.
    4. Fix, Blair, 2018. "The growth of US top income inequality: A hierarchical redistribution hypothesis," Working Papers on Capital as Power 2018/05, Capital As Power - Toward a New Cosmology of Capitalism.
    5. Shaikh, Anwar & Papanikolaou, Nikolaos & Wiener, Noe, 2014. "Race, gender and the econophysics of income distribution in the USA," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 415(C), pages 54-60.
    6. Mayerhoffer, Daniel & Schulz-Gebhard, Jan, 2023. "Social segregation, misperceptions, and emergent cyclical choice patterns," BERG Working Paper Series 186, Bamberg University, Bamberg Economic Research Group.
    7. Peter J. Lambert & Subbu Subramanian, 2015. "Shaikh and Ragab's `Incomes of the Vast Majority': Some additions and extensions," Working Papers 354, ECINEQ, Society for the Study of Economic Inequality.
    8. Anwar Shaikh, 2018. "Some Universal Patterns in Income Distribution: An Econophysics Approach," Working Papers 1808, New School for Social Research, Department of Economics.
    9. Schulz, Jan & Mayerhoffer, Daniel M., 2021. "A network approach to consumption," BERG Working Paper Series 173, Bamberg University, Bamberg Economic Research Group.
    10. Paulo H. dos Santos & Igor D. S. Siciliani & M. H. R. Tragtenberg, 2021. "Optimal Income Crossover for Two-Class Model Using Particle Swarm Optimization," Papers 2112.02449, arXiv.org.
    11. Fix, Blair, 2018. "The Growth of US Top Income Inequality: A Hierarchical Redistribution Hypothesis," SocArXiv suqnk, Center for Open Science.
    12. Anwar Shaikh, Amr Ragab, 2007. "WP 2007-3 An International Comparison of the Incomes of the Vast Majority," SCEPA working paper series. 2007-3, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.

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