ECON 426 Lecture Notes - Lecture 24: Pareto Distribution
13 Jun 2018
School
Department
Course
Professor
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Forbes Highest Paid Musicians, 2017
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Why do so much of earnings accrue to so few individuals - earnings differences become so large so
rapidly?
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Why is it that the earnings distribution is so right-skewed?
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We're seeing an increase in income share in the tail of the distribution
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The tail of the distribution is continuing away from the bottom (mass of the distribution)
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How has this changed over time?
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What determines income differences and their spread among top earners?
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They are…THE 1%
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At the upper end, the Income Distribution is well described by a "Pareto Distribution"
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It implies that the fraction of income held by the top q-th percentile is:
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The Income Distribution has a Pareto Tail
Lecture 24 - Superstar Economics
Wednesday, April 11, 2018
4:12 PM
ECON 426 Page 1
