the wisdom of crowds isn't

[rmd]

via jpmassar, an article that includes INFOGRAPHICS and everything about how misinformed most people are about the wealth distribution in the United States. (Wealth, not income.) Slate takes a look at it, too.

Here's the graphic, found on page 13 of the original paper (link goes to a pdf)

From the pdf: "Note: Because of their small percentage share of total wealth, both the “4th 20%” value (0.2%) and the “Bottom 20%” value (0.1%) are not visible in the “Actual” distribution."

Comments

[irilyth]

Just to double, check, the "20%"s are 20% of the population, sorted by wealth?

I'd be curious to see what a wealth distribution graph would look like for some of these bars. In particular, it doesn't seem surprising to me that the wealthiest 20% of the population have way more than 20% of the wealth (and that the least wealthy 20% have way less than that) -- isn't the whole point that they're more (or less) wealthy than most people? It seems intuitively nonsensical to think that the bottom 20% could possibly have 10% of the wealth; while the top 20% would have only 30%; wouldn't that imply that the wealthiest people are only three times as wealthy as the least wealthy people? That seems obviously crazy, given that lots of people have basically zero wealth, because their income and expenses are very close...

[irilyth]

> I'd be curious to see what a wealth distribution graph would look like for some of these bars.

To phrase this a different way: In the actual distribution, how wealthy is the 85% person? Do they have a billion dollars, or a million, or a hundred thousand, or what? I have almost no intuitive sense of this, other than a feeling that it's lower than most people would guess (because of the "lots of people have basically zero wealth" problem). And ditto the 15% person.

Similarly, in the estimated an ideal distributions, how wealthy is the 85% person and the 15% person?

[emmacrew.livejournal.com]

Based on this chart (http://en.wikipedia.org/wiki/File:USmedianfamilynetworthbynetworth.gif), the median net worth of families between the 75th and 90th percentiles is about $500K, so the top quintile above probably covers everyone from something like $400K net worth on up to the Gateses.

[navrins]

Wow. I find that chart surprisingly hard to understand correctly. I've figured it out, I think, and it doesn't actually say anything that still seems obviously wrong to me... but it took me a long time to figure out that it wasn't saying the median income is a lot higher than I know it to be (around $50k).

There also seems something odd about citing the median income of particular income brackets, though I can't quite put my finger on exactly what it is.

[rmd.livejournal.com]

It's not income, though. It's wealth. So if we both made the average annual income, but you had a $10M trust fund while I had no major assets and a house with an underwater mortgage, you'd be in the top quintile and I'd be somewhat lower down.

[navrins]

Oh! Wow, I totally missed that. Okay. Hm. I don't think I have any instincts about what that would be.

[emmacrew.livejournal.com]

Yeah, it was the best 5 minutes of googling got me. It's also wealth, not income, but there is something odd about it indeed.

[rmd.livejournal.com]

sure. what's remarkable (at least to me) is how *wrong* people are about what they think the distribution is vs the actual distribution. pretty much everyone being off by over an order of magnitude for nearly half the population is, frankly, remarkable.

the "ideal" is misleading -- it was a set of three possible distributions that people could select. one was equal distribution, one was the current actual distribution in the US, and the middle one was a distribution that most resembles sweden. those commie socialist bastards.

[lil-brown-bat.livejournal.com]

So basically, people think things are a lot more equitable than they are. Not surprising.

[browngirl.livejournal.com]

This is really educational. Thank you.

[milktree.livejournal.com]

Woah... I didn't realize it was *that* bad. (both in actual disparity and perceptions)

[milktree.livejournal.com]

Here's a related article on our perceptions of tax rates:

http://www.datapointed.net/2010/04/historical-us-income-tax-brackets/

We're just not paying that much taxes.