Income Inequality and Scale Independence

December 10th, 2009
money, politics
Looking around at different ways of measuring income inequality (which I'm not convinced is a problem in and of itself: "people start startups in the hope of becoming much richer than they were before. And if your society tries to prevent anyone from being much richer than anyone else, it will also prevent one person from being much richer at t2 than t1") and I see that "scale independence" is valued in an income inequality metric. I'm not sure it should be. If you have a society and make everyone 2x richer, then a scale independent metric would say inequality hasn't changed. But what if you make everyone 1000x richer? Because the value of money is not linear in the amount you have (I would rather have a 50% chance of gaining $1M than a 25% chance of gaining $2M. Heck, I'd even prefer it to a 25% chance of gaining $3M.), as you scale incomes up inequality decreases. What I want is an income inequality metric that is explicitly scale dependent, considering along with each income the decreasing value of large amounts of money.

Comment via: facebook, substack

Recent posts on blogs I like:

Ozy and Vasili Review Lilo and Stitch

Sometimes my seven-year-old, Vasili, wants to see some godawful movie that makes me want to melt my eyeballs out of my head.

via Thing of Things June 27, 2025

Elixir's Last Dance

On May 18th, the contra dance band Elixir had their last gig ever. The dance was packed: there were three hundred people. It was the only dance BIDA has ever done where they sold tickets. People flew from across the country just to hear Elixir play one la…

via Lily Wise's Blog Posts June 5, 2025

Workshop House case study

Lauren Hoffman interviewed me about Workshop House and wrote this post about a community I’m working on building in DC.

via Home April 30, 2025

more     (via openring)