Prom Dresses Big Boobs

MISERABLE RICH RICO

"Why inequality causes the rich feel poor?

Paul Krugman (*)

Rampello Catherine has written a short article on why nice rich feel the objectively subjectively poor. However, Brad Long is right: a logarithmic plot can be even more instructive:

I would like to discuss some of this diagram, relates the annual income and tax units percentiles.

Rampello What has in mind is a vision of society as a long road up a hill, so the increased height goes hand in hand with increasing income. And every person on the street over valued itself in relations with neighbors the street, not in relation to the whole street.

Well, there are two slightly different interpretations of this story. What Rampello seems to suggest is that people compare themselves only with their neighbors to the upper section, and since it is increasingly difficult to bottom as you go up, the rich feel worse because the guy in front is becoming increasingly distinct from them.

An alternative is that people compare themselves with neighbors on both sides of the street, but what changes is the convexity: if you find yourself in the middle of the distribution strip income, your neighbor from the upper stretch will be richer than you in the same way that you are poorer neighbor to the lower stretch, but in the upper reaches of the hill that's not true. (Long ago, I was taught that income distribution is roughly log-normal for most of its range, but it is Pareto in the upper section. If you have no idea what I'm talking about, do not worry .)

Be that as it may, the fact is that the gap between rich and archiricos has grown dramatically. Here are the Piketty-Saez data, in which we can see how 1 percentile of the peak moves away from the next 4, the same is happening with the band of 0.1% richer in relation to the losers within range 99.0 to 99.9. And so on:

The net result is a society of winners and winners, in which people who not only is doing great, but is doing relatively better than the medium in which they were a generation ago feel, despite everything behind.

a personal note from my point of view, I have always found relaxing extreme inequality at the top. Robin and I are going great, of course, but others are much richer, the fact is, however, that especially in New York, you know, you earn what you earn, there are others who earn so much that your income seem trivial. So, why nurture yourself this way? Of course it's much easier to feel that way when you're done with many other ego enhancers.

Paul Krugman is professor of economics at Princeton. Nobel Prize was in 2008.

--------------------