Timeline for Would the median household income in the USA be $140K and mean net worth $800K if wealth were evenly distributed
Current License: CC BY-SA 4.0
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| Apr 8, 2021 at 14:24 | review | Suggested edits | |||
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| Apr 3, 2021 at 20:52 | comment | added | henning no longer feeds AI | @alephzero so what? | |
| Apr 3, 2021 at 16:14 | vote | accept | matt_black | ||
| Apr 3, 2021 at 16:14 | history | edited | matt_black | CC BY-SA 4.0 |
added clarification about the median being the same as the mean in a flat distribution and removed the note about the edit history of the title as it is not relevant given this observation.
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| Apr 1, 2021 at 20:40 | history | edited | DavePhD | CC BY-SA 4.0 |
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| Apr 1, 2021 at 18:11 | history | edited | DavePhD | CC BY-SA 4.0 |
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| Apr 1, 2021 at 16:41 | comment | added | Oddthinking♦ | Comments deleted. The comment fields are NOT the place to argue your personal views of economics. They should be focused on improving the answer. There is chat (linked under the question) for such discussion. | |
| Apr 1, 2021 at 14:58 | comment | added | alephzero | The only answerable version of the OP's question is to treat it as an elementary statistics exercise divorced from reality. It ignores the fact that if everyone's income and net worth was equal, the economic situation of the USA would be completely different. (Obvious example: would Elon Musk have been able to found Tesla and SpaceX, with a personal net worth less than USD 1m, even if he had still wanted to?) | |
| Apr 1, 2021 at 14:24 | review | Suggested edits | |||
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| Apr 1, 2021 at 14:13 | comment | added | user3067860 | @quarague It's not really clear that "wages" appear out of thin air, either. Surely we have the same problem if I pay you to clean my house vs doing it myself. | |
| Apr 1, 2021 at 14:05 | comment | added | Lio Elbammalf | @DavePhD your answer is still correct. The mean and median are the same for an equal distribution where every US household has $151,825. Whether you use the word mean or median for it is besides the point, really. | |
| Apr 1, 2021 at 13:53 | review | Suggested edits | |||
| Apr 1, 2021 at 13:54 | |||||
| Apr 1, 2021 at 13:53 | history | edited | DavePhD | CC BY-SA 4.0 |
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| Apr 1, 2021 at 13:50 | comment | added | DavePhD | @DavidHammen The question changed after I answered it. The question specially asked for "mean" when I answered. See the edit history of the question. | |
| Apr 1, 2021 at 12:54 | comment | added | quarague | @Barmar True. I'm not saying the answer is wrong, I'm just pointing out that it is not really a meaningful quantity the way OP wants to use it. | |
| Apr 1, 2021 at 12:43 | comment | added | Barmar | @quarague The quote in the question says "income from all sources", so it's not just wages. | |
| Apr 1, 2021 at 12:02 | comment | added | Kvothe | Perhaps the entirely obvious implication that the mean that DavePhD computed is also the median in the proposed hypothetical could be made more explicit. | |
| Apr 1, 2021 at 12:01 | comment | added | Kvothe | @DavidHammen, you seem to entirely miss the point so let's spell it out in a comment: The question was about "What would happen to the median household income were US income and net wealth were distributed evenly across households?" In that case the median is equal to the mean (as is the highest, the lowest etc). So to compute the mean income and mean net worth is exactly as computing the median income or net worth under the proposed redistribution. The computation is thus entirely accurate and does not make any mistake confusing median and mean. | |
| Apr 1, 2021 at 12:00 | comment | added | Michael Seifert | @DavidHammen: In a hypothetical world like Andersen is discussing, where everyone has the same net income, the mean net income is equal to the median net income. | |
| Apr 1, 2021 at 11:38 | comment | added | Manziel | @DavidHammen That is probably the point of the book, that income and especially wealth are strongly skewed. If a society is unequal but in a balanced way, it is pointless to compare mean and median. It does not make a difference in the numbers whether everybody has 500$ or one third has 0, one third has 500 and one third has 1000$, the mean and median are the same in both cases. But the first case is clearly more equal than the second case | |
| Apr 1, 2021 at 11:19 | comment | added | nanoman | @DavidHammen See my comments on the question. I think it is indeed appropriate to evaluate Andersen's claim by computing mean income and wealth, because Anderson is considering a hypothetical where the total income and wealth are equally distributed, which is a way of defining the mean. | |
| Apr 1, 2021 at 10:58 | comment | added | David Hammen | Downvoted. The question asks about median net worth and income. This answer specifies values for the mean net worth and income. Mean and median can be very different for a skewed probability distribution. Both net worth and income are rather skewed in the US. Median net worth is about $100K rather than one million, making net worth an extremely skewed statistic. Household income was $78K in 2020 rather $152K, making income also quite skewed (but not nearly as skewed as net worth). | |
| Apr 1, 2021 at 10:04 | comment | added | quarague | Note that of the 19.5 trillion $ income only about 11.7 trillion are wages, the rest is other income like capital gains. For example if you owned your and my house and I pay you 1000$ to live in mine, stating that our average income is 500$ is quite misleading. If we each owned our houses, our average income would be 0$ instead. | |
| Apr 1, 2021 at 8:18 | comment | added | nanoman | Rather than just state the numbers, it would be good to use them to evaluate the specific statements in the question. As I read it: Andersen's numbers are approximately correct, and if anything may slightly understate the extent of inequality (differences between median and mean). | |
| Apr 1, 2021 at 1:27 | history | edited | DavePhD | CC BY-SA 4.0 |
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| Apr 1, 2021 at 1:22 | history | answered | DavePhD | CC BY-SA 4.0 |