Income, Wealth and Statistics

In summary: Accounting is important. Bob taught in the public school system and has just retired. He has a $40,000 a year pension. Joe taught at a private school system and has just retired. His 401(K) is returning $40,000 a year to him. Otherwise they have the same assets. Who is richer?In most studies, Joe would be considered about a million dollars richer than Bob, even though their standards of living are identical. This is solely due to how we usually calculate wealth - we include defined contribution plans and exclude defined benefit plans. As the fraction of people with defined contributions plans instead of defined benefits plans rises, the calculated wealth disparity will rise, even
  • #36
That is what I would expect to happen as people move from defined benefits plans (pensions) and into defined contributions plans (401K's and similar).

It is also what I would expect during a housing price slump. A 35-year old with the typical low US savings rate has essentially all his wealth tied up in one asset: the home.

The more interesting statistics is that when this 35-year old becomes 65, under what assumptions does his standard of living exceed, lag or equal the present day 65-year-old.
 
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  • #37
apeiron said:
While people typically accumulate assets as they age, this wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago, after adjusting for inflation.
Actually, apeiron didn't say that, it was a quotation from another source. How do you adjust a ratio for inflation?
 
  • #38
apeiron said:
Inequality still trending. Pew reports...



Of course, what this actually means is that today's young can expect to be super-rich when they get old as by then the going disparity should be 470 to 1 or sumpthing. :smile:

Another sharp observation is the old get the lion's share of welfare too. Result!

Well, what has happened. Is it that older people got richer or young people got poorer?
 
  • #39
Vanadium 50 said:
Which is maybe a good example of the points I was making.
Hi Vanadium 50,

I don't think its because they are sitting on nest eggs as many have been forced back into the workforce due to the GFC and the destruction of their hard earned wealth.

The following is a letter to the editor in todays Australian newspaper.

Peter Troy said:
Without wishing to comment adversely on pay rises for social and community workers, I am sure that there are many self funded retirees living on half the wage of $40,000 a year who would love a job earning that much instead of sitting at home checking their spreadsheet to see their savings dwindle down to nothing.
 
  • #40
I don't find a letter to the editor a good counter-argument that differences in the way accounting for retirement plans is done need to be corrected for when drawing conclusions about how things have changed in 30 years.
 
  • #41
John Creighto said:
Well, what has happened. Is it that older people got richer or young people got poorer?
Both, with the caveat that (as is part of the purpose of this thread), you need to be careful characterizing "rich" and "poor" based on net worth. Particularly when it comes to variation by age, net worth doesn't have a good correlation to the dictionary definition or the US measure of poverty. In other words, young people are taking on more debt, but that doesn't necessarily mean they are living poorer lifestyles.
 
  • #42
Vanadium 50 said:
I don't find a letter to the editor a good counter-argument that differences in the way accounting for retirement plans is done need to be corrected for when drawing conclusions about how things have changed in 30 years.
At least it wasn't an editorial or a feature.
This was in the Australian context where we had universal pensions and they are now being phased out and substituted with mandatory superannuation that is currently 12% of an employees wage. The rate had gone from 3% to 9% over the past 15 years so most of the people around the changeover have not only contributed less than they would have liked but have lost a fair portion on the stockmarket because that's where the Super funds invest.
 
  • #43
russ_watters said:
In other words, young people are taking on more debt, but that doesn't necessarily mean they are living poorer lifestyles.

Can you substantiate this with a source? I guess for people under 35 wealth isn't the best measure of prosperity but I can't expect the youth now to be significantly more prosperous given the large payments they must make on student debt. The fact that so many are forced to live at home could be a sign of not having the money to independently have a decent standard of living.


I'll concede that wealth statistics could be somewhat misleading now because when the Baby boomers start drawing down their retirement savings asset valuations will likely fall.
 
  • #44
John Creighto said:
Can you substantiate this with a source?
Sure. While the wealth gap has doubled since 2005, the average incomes of the young have only dropped somewhere on the order of 8% in 10 years: http://www.usatoday.com/news/nation/census/2009-09-17-young-people_N.htm

Note that both of these are uselessly short time periods, though.
I guess for people under 35 wealth isn't the best measure of prosperity but I can't expect the youth now to be significantly more prosperous given the large payments they must make on student debt.
I didn't say they were any more prosperous, much less significantly. Particularly in a recession, the young get hit harder, with higher unemployment and underemployment (due to not getting hired after college).
 
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  • #45
I suspect that the wealth gap since 2005 is a consequence of the drop in home prices. Younger people are more highly leveraged and tend to have a higher fraction of their assets in their homes.

During the slide in prices, even though I lost more in absolute terms than my neighbor, I lost less relatively than her: I had more equity so less leveraging, and I had a more diverse asset allocation.
 
  • #48
I found this diagram from xkcd fascinating: money.

Especially relevant to changing relative wealth and the present resentment with big bonuses etc. is under the 'dollars' section 'Worker/CEO pay comparison' comparing 1965 rates with 2007 (adjusted for inflation).Garth
 
  • #49
Meanwhile, in Europe:

Banks are benefiting from a European Central Bank subsidy that could reach 120 billion euros ($158 billion), enough to pay every bonus at financial firms in London for the next 24 years at today’s levels. -- Bloomberg

Uhm... Okay?
 
  • #50
russ_watters said:
Those are issues with the stats themselves. Of equal concern to me is the common implication that wealth inequality is a measure of/proxy for poverty. This comes largely from the fallacy that wealth is a zero sum game: "the rich get richer while the poor get poorer."

You're saying the deffinition of poverty is floating? I get that a $$ value is assigned, but the standard of living assigned for "poverty" hasn't change has it?

The rich do get richer, the poor grow in population. (i.e. population "get poorer")

I'd say nearly by definition it's not a fallacy, rich people don't put the money back into the system, and in the important areas. There is only so much a single person can consume, the rest is literally keeping the monies out the other people's pockets.

Upto about 60k annual or so it's a standard of living issue, after that value, it's fun and games. It's no wonder the dicotamy between ideals of poor people & rich people in this context is what it is.

The fallacy is in rich people's greed for wealth; specifically the line "I've earned it.". It's a meaningless objective/argument to someone who is hungy, in need of healthcare or to poor to become sufficiently employed (educated).

I want to point out, in case it's not transparent, that I'm comparing those in poverty to those with say wealth in the 10's of millions & up, where the gap is blatant. Like I said, after a relatively low level of income, it's fun & games, trully. So a simular comparison could be made between those in poverty and those of mediocre income.

Said different, I see no moral issue with "I have to take the bus", and someone who happened to get in on an "sure win" IPO drives a ferrari as a result.
 
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  • #51
nitsuj said:
You're saying the deffinition of poverty is floating? I get that a $$ value is assigned, but the standard of living assigned for "poverty" hasn't change has it?

The rich do get richer, the poor grow in population. (i.e. population "get poorer")

I'd say nearly by definition it's not a fallacy, rich people don't put the money back into the system, and in the important areas. There is only so much a single person can consume, the rest is literally keeping the monies out the other people's pockets.

Upto about 60k annual or so it's a standard of living issue, after that value, it's fun and games. It's no wonder the dicotamy between ideals of poor people & rich people in this context is what it is.

What is the definition of poverty in the US?
 
  • #52
WhoWee said:
What is the definition of poverty in the US?

It is "floating"! wow, in that case, I agree with russ_watters a bit more.

What a capitalist approach!

lol, reading about poverty, it appears there is "Absolute Poverty" (education / healthcare / food ect) and relative poverty (my neighbour is a millionaire, why not me!).

Sorry I assumed poverty meant below some standard of living, based on basic human needs, and not on how well off you are compared to the neighbours. The latter is clearly independent of morals, assuming you are not in "absolute poverty".

Poverty is a really bad term for that context, the deffinitions between "Absolute Poverty" & "Relative Poverty" are completely different morally.
 
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  • #53
Yes, it is an odd and surprising phenomena that often times, the measure of poverty has little to do with standard of living.
 
  • #54
This is also a problem with comparing poverty rates over time, as the definition and buying power have both shifted over time. Today, the fraction of families below the poverty line with multiple televisions is twice what it was for all families in the 1970's.

While this tells you something about poverty trends, it also tells you something about the price of televisions.
 
  • #55
Some things have become more expensive over time in terms of constant dollars. Others have become much cheaper. Our first color television, for example, costs $380 in 1970. In today's dollars, that's about $2,200. It was a 17"! You can't even find a comparable TV today, but a 17" TV/Monitor will run you about $150, or about $27 in 1970's dollars.

Bread, meanwhile, costs about the same in terms of constant dollars.

A more accurate way of comparing prices, however, is as a percentage of the average income, provided.
 
  • #56
Some of the parameters that seem to separate rich neighborhoods from poor ones here in NYC are:

1)Access to a safe neighborhood: crime rates are higher in lower-income areas.
Same with access to safe parks. This can also be seen as a mental-health issue.

2) Access to fruits, vegetables and overall quality food. See mostly junk food, few
fruits, vegetables available in poor areas. I had to travel a good amount to find
something other than fried chicken, BK, or one of the fruit-and-vegetable stands that
are so common on wealthier areas. Markets carry mostly sugary and heavily-processed foods in poor areas.

3)Access to quality education at the high school level. This has to see in part on how education is funded. Some private schools offer college-level courses to high school-level kids (I tutored a few of these kids myself). I think few would argue that those taking college-level courses in high school has a significant advantage over those who do not.

Would most agree that all should have reasonably-equal access to all of the above ( if so, we can discuss how to accomplish this)?
 
  • #57
Bacle2 said:
Would most agree that all should have reasonably-equal access to all of the above ( if so, we can discuss how to accomplish this)?
Depends on what you mean by that. In the US, there are no restrictions on population movement, so by one measure, access is already equal.

There is also the cause-effect problem: quality neighborhoods are quality neighborhoods because quality people live there.
 
  • #58
russ_watters said:
There is also the cause-effect problem: quality neighborhoods are quality neighborhoods because quality people live there.
Depends on what you mean by that. I'm sure Berney Madoff lived in a quality neighborhood.
 
  • #59
russ_watters said:
Depends on what you mean by that. In the US, there are no restrictions on population movement, so by one measure, access is already equal.

There is also the cause-effect problem: quality neighborhoods are quality neighborhoods because quality people live there.

There is the effective restriction of affordability: rents are significantly higher in the better-served areas.

Do you seriously believe most people would not move to an area with better schools for their children, etc., if they could?

And I doubt you can argue a child growing in poorer areas should take-on the burden of improving the areas him/herself. Maybe you can ask for an adult to do so (still, easier to do when you have a top-level education and the access to powerful people that comes from studying at an elite school) but not a child.

Maybe some of the residents could do more than they now do, but this still seems like an unfair situation. Try living in one (if you haven't yet) like I did for a few years and you'll see. See what it is to worry about being mugged when you're coming home. Or see how it was decided that many of the the dirtiest and noisiest activities where dumped in your area of town, etc. Basically, your access to a lot of the things (most consider) make life better , is restricted in comparison to others. It makes a difference over the longer run,believe me.

There is still an element of personal responsibility, maybe in organizing, but the situation seems unfair nonetheless.

( And, for the sake of accuracy, there are (effective-de facto) restrictions in movement; ask my international student friends, who cannot move out-of-town unless they get a transfer to another school, or else spend many months changing their status (if they lose their status, they're not in compliance). And still they pay around 10X tuition. No wonder they all tell me they wish they had gone to Canada instead--see where else we'll get our next supply of scientists and enterpreneurs. Same goes for many other non-resident immigrants.

You may argue this is not unfair; I'm just stating this as a fact (tho I do not believe it is fair.))
 
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  • #60
russ_watters said:
Depends on what you mean by that. In the US, there are no restrictions on population movement, so by one measure, access is already equal.

There is also the cause-effect problem: quality neighborhoods are quality neighborhoods because quality people live there.

Well there are economic limits due to scarcity.

But I think the problems we have are more due to the high inequality we have. Inequality is a decent measure of how the rewards system is working in our economy. If we have too much equality, people are not properly rewarded for their efforts; as a result, they lose incentive to do more. If we have too much inequality, some people are over-rewarded for their efforts leading to unrewarding for others for their efforts due to scarcity of resources, so incentives to do more is removed here too.

Since most people accept the argument about equality, I'll will skip it and go into more details on high inequality.

1. Economics is about managing limited resources of scarcity.
2. When people are over-rewarded for their work, other people will be under-rewarded for their work because of the limitation imposed by scarcity.

For the purpose of argument, let's pretend there exists a pie, and all Americans are competing for a slice of it. Suppose a Janitor does a great job cleaning, and he or she is over-rewarded for his job by being given half of the pie. Everyone else in America must not complete for the remaining half of the pie. Suppose an actor does a good job in a movie, he or she is over-rewarded with half of the remaining half of the pie. The rest of America must now compete over 1/4 the pie. Now suppose a great scientists cures cancer, creates an amazing new type of battery, and just does amazing stuff in general. The most he could be rewarded is 1/4 of the pie since 3/4 of the pie is already given out through over-rewarding people. And this is despite the fact that his work is much greater than theirs. In a basic nutshell, over-rewarding is just as bad as under-rewarding. Both high equality and high inequality lead to the same thing: a bad economy.
 
  • #61
SixNein said:
Well there are economic limits due to scarcity.
For the purpose of argument, let's pretend there exists a pie, and all Americans are competing for a slice of it.

This analogy will only make sense if this is a magic pie that grows in line with the economic activity of the Americans competing for it

SixNein said:
Suppose a Janitor does a great job cleaning, and he or she is over-rewarded for his job by being given half of the pie. Everyone else in America must not complete for the remaining half of the pie. Suppose an actor does a good job in a movie, he or she is over-rewarded with half of the remaining half of the pie. The rest of America must now compete over 1/4 the pie. Now suppose a great scientists cures cancer, creates an amazing new type of battery, and just does amazing stuff in general. The most he could be rewarded is 1/4 of the pie since 3/4 of the pie is already given out through over-rewarding people. And this is despite the fact that his work is much greater than theirs.

Who decides who gets what slice of the pie?
 
  • #62
Bacle2 said:
You may argue this is not unfair; I'm just stating this as a fact (tho I do not believe it is fair.))
I would argue that fairness itself is an over-rated and usually self-serving concept developed by four-year-old children in order to get their own way. It is embarassing for mature adults to fret over fairness.
 
  • #63
That is circular reasoning. What is your argument against fairness?

The laws act as an agreement among citizens to follow a certain guideline establish and agreed upon by most if not all parties. If one side-steps the law, is that person not being fair to the others?
 
  • #64
boomtrain said:
This analogy will only make sense if this is a magic pie that grows in line with the economic activity of the Americans competing for it

Who decides who gets what slice of the pie?

There is nothing magical about the analogy. We have limited resources that we divide up with whatever economic policy we use.

Economic policy will ultimately decide who gets what. For example, suppose the US decided to employ Marxism and try to achieve equality. In such a case, the pie would be divided evenly across the population. But this in turn has negative consequences that I think everyone here would accept without argument.

The government needs to set a policy targeting the most optimal Gini coefficient. And every economic policy it creates needs to begin with how it effects the reward system we have.
And this is not only true for America, I think most western nations need to do this.

At any rate, America's social mobility is very bad. If your born poor, your probably going to die poor.

Our reward structure created from our economic policy is out of whack.
 
  • #65
Mentalist said:
That is circular reasoning. What is your argument against fairness?
It is not circular reasoning. One issue is that life isn't "fair", whatever that is. This leads to another issue: "fairness" is an ill-defined concept.

The laws act as an agreement among citizens to follow a certain guideline establish and agreed upon by most if not all parties. If one side-steps the law, is that person not being fair to the others?
First off, that's irrelevant for the most part for the simple reason that the vast majority of citizens abide by the law.

More importantly, the law is not concerned with "fairness", whatever that is. It's concern is justice and protection of the public. Consider the fate of three criminals. One is an armed robber who at gunpoint steals a cheap watch and a bit of cash from a couple who accidentally walked down the wrong street. Net take: $200. The second is a burglar who breaks into a house while the owners are on vacation and steals jewelry galore, a couple of computers, and a fancy TV. Net take: $20,000. The third is an embezzler who over time steals little bits of money but from lots and lots of people. Net take: $2,000,000.

Which one gets the harshest penalty? It's the armed robber, of course. The law is very cognizant of the fact that the victims who suffered the greatest trauma was the couple who were robbed at gunpoint. The law is also very cognizant of the fact there is a pencil-thin line between armed robbery and murder. The fact that the armed robber did not harm his victims is irrelevant. Is this fair? Some think not. That's not the point of the penalties. The point is to protect and serve the public.

Back to the law abiding citizens, is it fair that someone who is a foot and a half taller than average and has far better reflexes than average can make millions of dollars a year just playing a game? Is it fair that someone with immense people skills can make hundreds of times what the average citizen makes, just because of those people skills? Is it fair that someone who is perhaps a bit reckless with her investments can eventually become a billionaire while ordinary people have struggle to build up a rather modest retirement nest egg? Is it fair that someone who happened to have ultrarich parents can fool around this week in Aspen, next week in Europe, and the following in the Hamptons, while everyone else works day in, day out? Life isn't fair. That's just how it goes. Besides who decides what constitutes "fairness"?

Stop fretting over fairness and make the best out of your own life.
 
  • #66
What does "very bad" mean in the context of social mobility? What does "poor" mean in the US?

The NYT article (which references Jantii) cites the following. Of US men raised in the bottom fifth: 58% move off the bottom; 35% will move up two fifths; 8% will migrate to the top fifth. And that's according to Jantti's research w/ the provocative title, who apparently is well respected but there is research all over the place on the subject as mentioned in the article. I suspect good data is hard to come by, as would be expected since the results require data on what happens to individual parent - child income, generation to generation.

http://www.sciencedirect.com/science/article/pii/S0049089X03000437
http://www.mitpressjournals.org/doi/abs/10.1162/rest.91.4.766?prevSearch=allfield%253A%2528solon%2529&searchHistoryKey=&
http://www.sciencedirect.com/science/article/pii/S0049089X0300043 [Broken]
http://onlinelibrary.wiley.com/doi/10.1111/j.1468-232X.2007.00456.x/abstract
http://www.ssc.wisc.edu/jhr/2008ab/aaronson1.htm [Broken]
http://www.chicagofed.org/digital_assets/publications/working_papers/2002/wp2002-08.pdf
 
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  • #67
Most people define fair to be what they themselves think is fair rather than what every single thing can agree on with the incredible amount of variation in both needs and desires and for this reason alone, fair-ness and an adequate definition there-of, will probably never be defined for a quite a long time to come.
 
  • #68
It is not circular reasoning. One issue is that life isn't "fair", whatever that is. This leads to another issue: "fairness" is an ill-defined concept.

You are certainly entitled to your opinion but do not make it seem as if it is a true one. I'd rather you put, "in my opinion".

First off, that's irrelevant for the most part for the simple reason that the vast majority of citizens abide by the law.

More importantly, the law is not concerned with "fairness", whatever that is. It's concern is justice and protection of the public. Consider the fate of three criminals. One is an armed robber who at gunpoint steals a cheap watch and a bit of cash from a couple who accidentally walked down the wrong street. Net take: $200. The second is a burglar who breaks into a house while the owners are on vacation and steals jewelry galore, a couple of computers, and a fancy TV. Net take: $20,000. The third is an embezzler who over time steals little bits of money but from lots and lots of people. Net take: $2,000,000.

Which one gets the harshest penalty? It's the armed robber, of course. The law is very cognizant of the fact that the victims who suffered the greatest trauma was the couple who were robbed at gunpoint. The law is also very cognizant of the fact there is a pencil-thin line between armed robbery and murder. The fact that the armed robber did not harm his victims is irrelevant. Is this fair? Some think not. That's not the point of the penalties. The point is to protect and serve the public.

Back to the law abiding citizens, is it fair that someone who is a foot and a half taller than average and has far better reflexes than average can make millions of dollars a year just playing a game? Is it fair that someone with immense people skills can make hundreds of times what the average citizen makes, just because of those people skills? Is it fair that someone who is perhaps a bit reckless with her investments can eventually become a billionaire while ordinary people have struggle to build up a rather modest retirement nest egg? Is it fair that someone who happened to have ultrarich parents can fool around this week in Aspen, next week in Europe, and the following in the Hamptons, while everyone else works day in, day out? Life isn't fair. That's just how it goes. Besides who decides what constitutes "fairness"?

Stop fretting over fairness and make the best out of your own life.
Justice and fairness are closely related as one constitutes, as you pointed out within your three propositions, a process given and judged because of the veracity of each situation. The exact content of fairness is indicated by the legitimacy and executed within the circumstances of the case. Justice comes in when one is given their due process for an injustice committed upon them.

Your next points about a person being taller, etc..., is not what I am concerning when speaking on fairness. As stated above, fairness is going by the established rules. You can say my position is “irrelevant” all you want, but you cannot also deny the main tenant of fairness I have pointed out within this thread, to which you have. I will state it again, fairness, is the account of everyone following established rules and when an injustice is committed upon a person, the guilty party is judged based upon the propensity of the damage, i.e. by the governing party and are judged based upon an impartial view of the law. That is justice or fairness, they aren’t mutually exclusive ideas.

So, when I say fair, I mean it within my reasoning given above, not what your argument is trying to make it out to be.

I will readdress one being taller, one being shorter, etc... Within my own reasoning of fairness, those would be considered acts by nature. One is taller simply because a combination of nature and genetics, thus he can reach further. Should he have his arm lopped off because he is taller than another? No because within my reasoning it would not fit the context and reasonableness of what is considered ‘fair’ and would be an injustice committed upon ‘said’ person. As goes the same for the rest of the examples. Nature has not agreed upon the rules of human society. Nature only acts upon society, it does not make decisions, holding it to a standard and attempting to reduce my argument to something as absurd of nature making conscious decisions concerning human society is something I take offense to.
 
  • #69
mheslep said:
What does "very bad" mean in the context of social mobility? What does "poor" mean in the US?

The NYT article (which references Jantii) cites the following. Of US men raised in the bottom fifth: 58% move off the bottom; 35% will move up two fifths; 8% will migrate to the top fifth. And that's according to Jantti's research w/ the provocative title, who apparently is well respected but there is research all over the place on the subject as mentioned in the article. I suspect good data is hard to come by, as would be expected since the results require data on what happens to individual parent - child income, generation to generation.

http://www.sciencedirect.com/science/article/pii/S0049089X03000437
http://www.mitpressjournals.org/doi/abs/10.1162/rest.91.4.766?prevSearch=allfield%253A%2528solon%2529&searchHistoryKey=&
http://www.sciencedirect.com/science/article/pii/S0049089X0300043 [Broken]
http://onlinelibrary.wiley.com/doi/10.1111/j.1468-232X.2007.00456.x/abstract
http://www.ssc.wisc.edu/jhr/2008ab/aaronson1.htm [Broken]
http://www.chicagofed.org/digital_assets/publications/working_papers/2002/wp2002-08.pdf

Bad meaning that it's in decline.
Poor is generally defined in this topic as the bottom fifth. Let's call them the poorest fifth to be clear.

Here is a nice little read on it by Economist:
http://www.economist.com/node/3518560?story_id=3518560
 
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  • #70
SixNein said:
There is nothing magical about the analogy. We have limited resources that we divide up with whatever economic policy we use.

Economic policy will ultimately decide who gets what. For example, suppose the US decided to employ Marxism and try to achieve equality. In such a case, the pie would be divided evenly across the population. But this in turn has negative consequences that I think everyone here would accept without argument.

Well actually, the pie would be mostly concentrated among the ruling elite (the Communist Party) with the rest of the scraps left for the general population.

At any rate, America's social mobility is very bad. If your born poor, your probably going to die poor.

Our reward structure created from our economic policy is out of whack.

I'd be careful with any article that cites a study by the Economic Policy Institute though. Not saying they are wrong, but they have a left-leaning political bias. It would be like citing a Cato Institute study that is critical of Obamacare. Doesn't mean it's wrong, but it would be a source that has a right-wing bias.
 
<h2>What is the difference between income and wealth?</h2><p>Income refers to the amount of money a person or household earns in a given period of time, typically a year. Wealth, on the other hand, is the total value of a person or household's assets, including savings, investments, property, and other possessions. While income is a measure of how much money is coming in, wealth is a measure of a person's overall financial worth.</p><h2>How is income and wealth distributed among different groups of people?</h2><p>The distribution of income and wealth can vary greatly among different groups of people, such as by race, gender, age, and education level. Generally, the top 1% of earners hold a disproportionate amount of wealth compared to the rest of the population. In terms of income, there is often a significant wage gap between men and women, as well as disparities among different racial and ethnic groups.</p><h2>What are some common measures of income and wealth?</h2><p>Some common measures of income and wealth include median income, which is the middle value in a list of incomes, and mean income, which is the average of all incomes. For wealth, common measures include median net worth, which is the middle value of all household assets, and mean net worth, which is the average of all household assets.</p><h2>How do income and wealth impact economic inequality?</h2><p>Income and wealth are closely tied to economic inequality, as those with higher incomes and more wealth tend to have more economic power and opportunities. Economic inequality can lead to social and political issues, such as unequal access to education and healthcare, and can contribute to social unrest.</p><h2>What is the role of statistics in understanding income and wealth?</h2><p>Statistics play a crucial role in understanding income and wealth, as they provide data and measurements that help to identify patterns and trends. Statistical analysis can also help to identify disparities and inequalities in income and wealth distribution, and inform policies and interventions to address these issues.</p>

What is the difference between income and wealth?

Income refers to the amount of money a person or household earns in a given period of time, typically a year. Wealth, on the other hand, is the total value of a person or household's assets, including savings, investments, property, and other possessions. While income is a measure of how much money is coming in, wealth is a measure of a person's overall financial worth.

How is income and wealth distributed among different groups of people?

The distribution of income and wealth can vary greatly among different groups of people, such as by race, gender, age, and education level. Generally, the top 1% of earners hold a disproportionate amount of wealth compared to the rest of the population. In terms of income, there is often a significant wage gap between men and women, as well as disparities among different racial and ethnic groups.

What are some common measures of income and wealth?

Some common measures of income and wealth include median income, which is the middle value in a list of incomes, and mean income, which is the average of all incomes. For wealth, common measures include median net worth, which is the middle value of all household assets, and mean net worth, which is the average of all household assets.

How do income and wealth impact economic inequality?

Income and wealth are closely tied to economic inequality, as those with higher incomes and more wealth tend to have more economic power and opportunities. Economic inequality can lead to social and political issues, such as unequal access to education and healthcare, and can contribute to social unrest.

What is the role of statistics in understanding income and wealth?

Statistics play a crucial role in understanding income and wealth, as they provide data and measurements that help to identify patterns and trends. Statistical analysis can also help to identify disparities and inequalities in income and wealth distribution, and inform policies and interventions to address these issues.

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