Europhys. Lett.
Volume 69, Number 2, January 2005
Page(s) 304 - 310
Section Interdisciplinary physics and related areas of science and technology
Published online 22 December 2004
Europhys. Lett., 69 (2), pp. 304-310 (2005)
DOI: 10.1209/epl/i2004-10330-3

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

A. Christian Silva and Victor M. Yakovenko

Department of Physics, University of Maryland - College Park, MD 20742-4111, USA

received 13 September 2004; accepted in final form 9 November 2004
published online 22 December 2004

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 the 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.

89.65.Gh - Economics; econophysics, financial markets, business and management.
89.75.Da - Systems obeying scaling laws.
05.20.-y - Classical statistical mechanics.

© EDP Sciences 2005