scholarly journals Scaling of urban income inequality in the USA

2021 ◽  
Vol 18 (181) ◽  
pp. 20210223
Author(s):  
Elisa Heinrich Mora ◽  
Cate Heine ◽  
Jacob J. Jackson ◽  
Geoffrey B. West ◽  
Vicky Chuqiao Yang ◽  
...  

Urban scaling analysis, the study of how aggregated urban features vary with the population of an urban area, provides a promising framework for discovering commonalities across cities and uncovering dynamics shared by cities across time and space. Here, we use the urban scaling framework to study an important, but under-explored feature in this community—income inequality. We propose a new method to study the scaling of income distributions by analysing total income scaling in population percentiles. We show that income in the least wealthy decile (10%) scales close to linearly with city population, while income in the most wealthy decile scale with a significantly superlinear exponent. In contrast to the superlinear scaling of total income with city population, this decile scaling illustrates that the benefits of larger cities are increasingly unequally distributed. For the poorest income deciles, cities have no positive effect over the null expectation of a linear increase. We repeat our analysis after adjusting income by housing cost, and find similar results. We then further analyse the shapes of income distributions. First, we find that mean, variance, skewness and kurtosis of income distributions all increase with city size. Second, the Kullback–Leibler divergence between a city’s income distribution and that of the largest city decreases with city population, suggesting the overall shape of income distribution shifts with city population. As most urban scaling theories consider densifying interactions within cities as the fundamental process leading to the superlinear increase of many features, our results suggest this effect is only seen in the upper deciles of the cities. Our finding encourages future work to consider heterogeneous models of interactions to form a more coherent understanding of urban scaling.

2018 ◽  
Vol 46 (9) ◽  
pp. 1627-1644 ◽  
Author(s):  
Somwrita Sarkar

Urban scaling laws summarise how socio-economic behaviours of urban systems may be predicted from city size. While most scaling analysis rests on using aggregate quantities (total incomes, GDP, etc.), examining distributions of these aggregate quantities (e.g. income distributions) could shed light on how socio-economic inequalities may correlate or be causally linked to city size. In this direction, this paper examines how geographic distributions and spatial inequalities of income and housing costs vary by city size. The paper presents three principal results. First, it brings out qualitative implications of quantitative scaling by relating scaling of the distributions of income and housing costs to their specific geographic concentrations. Second, it shows that some small and medium sized cities are clear outliers, showing behaviour similar to the largest cities and starkly different from the behaviours of the bulk of small and medium sized cities. Third, this above observation explains why heteroscedasticity, or large and heterogeneous fluctuations, are frequently observed in urban indicator data when plotted as a function of city size. Putting together these three results, overall, it is shown that income distributions and housing costs scale and concentrate in cities by size in a predictable way, where the largest cities superlinearly/disproportionately agglomerate the highest income earners and the highest housing costs, and show relatively lower concentrations of low-middle income earners and low-medium housing costs. In contrast, most of the smaller and medium sized cities show a ‘flipped’ opposite trend. A few small and medium sized cities are outliers: they show trends that match those of the largest cities, due to specialisations of economic functions or concentrations of high-paying occupations in these cities. The empirical findings lead to a discussion on the objective and normative relationships between city size and urban inequalities. It is suggested that due to the concentrations of high income and high housing costs, largest cities may have a resulting housing market structure that will push out lower and medium income earners, thereby making affordability, diversity, and socio-spatial justice emerge as important urban policy issues.


2019 ◽  
Vol 6 (10) ◽  
pp. 190027 ◽  
Author(s):  
Eszter Bokányi ◽  
Dániel Kondor ◽  
Gábor Vattay

Scaling properties of language are a useful tool for understanding generative processes in texts. We investigate the scaling relations in citywise Twitter corpora coming from the metropolitan and micropolitan statistical areas of the United States. We observe a slightly superlinear urban scaling with the city population for the total volume of the tweets and words created in a city. We then find that a certain core vocabulary follows the scaling relationship of that of the bulk text, but most words are sensitive to city size, exhibiting a super- or a sublinear urban scaling. For both regimes, we can offer a plausible explanation based on the meaning of the words. We also show that the parameters for Zipf’s Law and Heaps' Law differ on Twitter from that of other texts, and that the exponent of Zipf’s Law changes with city size.


PLoS ONE ◽  
2021 ◽  
Vol 16 (3) ◽  
pp. e0249204
Author(s):  
Ji-Won Park ◽  
Chae Un Kim

Income inequality is known to have negative impacts on an economic system, thus has been debated for a hundred years past or more. Numerous ideas have been proposed to quantify income inequality, and the Gini coefficient is a prevalent index. However, the concept of perfect equality in the Gini coefficient is rather idealistic and cannot provide realistic guidance on whether government interventions are needed to adjust income inequality. In this paper, we first propose the concept of a more realistic and ‘feasible’ income equality that maximizes total social welfare. Then we show that an optimal income distribution representing the feasible equality could be modeled using the sigmoid welfare function and the Boltzmann income distribution. Finally, we carry out an empirical analysis of four countries and demonstrate how optimal income distributions could be evaluated. Our results show that the feasible income equality could be used as a practical guideline for government policies and interventions.


Author(s):  
Birgitta Jansson

AbstractSweden has been known for having one of the most equal income distributions in the world. However, in recent decades, Sweden has experienced increasing income inequality. An alternative way of measuring the development of inequality is to study and compare the income development within and between two birth cohorts according to gender and different positions of income distribution. The focus in this paper is to study how individual disposable personal income has changed by aging and at various positions of the income distribution, as well as the gender disposable income gap and intragenerational income mobility. Three positions of the income distribution were chosen: percentile 10; median; and percentile 99. Two cohorts, including all individuals born in 1948 and 1958, were tracked from 35 years of age to 53 years of age – with two 18-year overlapping periods, 1983–2000, and 1993–2010. The results show a complex and multifaceted image of the development of income inequality and mobility, within and between the two birth cohorts. Especially male low-income earners, born 1958, have been left behind. Income mobility differ according to gender where women have increased mobility in the bottom quintile and decreased in the top quintile, men experienced the opposite. When modelling mobility education have decreased to contribute to an upward mobility, especial for cohort born 1958. Taking all the results together, the development of increasing income inequality in Sweden is apparent.


2020 ◽  
pp. 201-205
Author(s):  
Vito Tanzi

Partly as a result of deregulation, cuts in marginal tax rates, globalization, the rise in importance of intellectual capital (combined with new communications technologies), the reduced power of labour unions, and more trust in the role of the market in determining some large compensations for CEOs, in recent decades there have been important changes in the distribution of incomes. Individuals in the top one, or 0.1 of the income distribution have been appropriating large shares of the growth of total income, while the majority of the population has seen their income stagnate. This has created resentment, and diminishing trust in the market and also in democratic institutions. We may be at a crossroads where, as in the 1920s, something will need to change. Keynes then called for “new knowledge.” The need for new knowledge seems to be equally acute now. That new knowledge should hopefully be “as simple as possible.”


2019 ◽  
Vol 113 (2) ◽  
pp. 385-404 ◽  
Author(s):  
MICHAEL T. DORSCH ◽  
PAUL MAAREK

Despite strong theoretical reasons to expect that democratization equalizes income distributions, existing empirical studies do not find a statistically significant effect of democratization on measures of income inequality. This paper starts from the simple observation that autocracies are heterogeneous and govern quite extreme distributional outcomes (also egalitarian). Democratization may drive extreme income distributions to a “middle ground.” We thus examine the extent to which initial inequality levels determine the path of distributional dynamics following democratization. Using fixed-effects and instrumental variable regressions, we demonstrate that egalitarian autocracies become more unequal following democratization, whereas democratization has an equalizing effect in highly unequal autocracies. The effect appears to be driven by changes in gross (market) inequality, suggesting that democratization has led, on average, to redistribution of market opportunities, rather than to direct fiscal redistribution. We then investigate which kinds of (heterogeneous) reforms are at work following democratizations that may rationalize our findings.


2018 ◽  
Vol 17 (3) ◽  
pp. 115-140
Author(s):  
Guanghua Wan ◽  
Ting Wu ◽  
Yan Zhang

This paper shows that the trend of worsening income distribution in China has been reversed. We ascertain the robustness of this decline using five nationwide household survey and different inequality indicators. Attempts are then made to uncover the underlying reasons. Major findings include: (1) The decline is largely due to improvement in the distribution of transfer income although its share in the total income is small and diminishing; (2) Occupational income, particularly its component of wage income, plays an important role; and (3) Other drivers include the expansion of the middle-income group, rapid urbanization, and the shrinking disparity within Eastern China.


Author(s):  
Elizabeth Anderson ◽  
Ing-Haw Cheng ◽  
Harrison Hong

Bill Gates recently argued that philanthropy by households at the top of the income distribution might help ameliorate income inequality, and that tax policies should take this into account. Much of the research in economics on giving has been focused on middle-income households, so we know very little about the motives for giving by the very rich. We provide some initial evidence on what drives the giving of the richest Americans. First, we extrapolate anthropological evidence on how status concerns might influence philanthropy. Second, since the richest own a significant amount of equity, we use the Jobs and Growth Tax Relief Act of 2003 to see how their giving responded to unanticipated tax cuts, particularly for dividends. Third, we consider the welfare implications of philanthropy as opposed to alternative models for redistributing the wealth of the extremely rich.


2020 ◽  
Vol 71 (1) ◽  
pp. 1-14
Author(s):  
Sugata Marjit ◽  
Reza Oladi ◽  
Punarjit Roychowdhury

AbstractMotivated by recent insights from behavioral economics and social psychology, we present a theory of trade that seeks to explain inter-industry trade between countries that are similar in their production sides, but differ in their income distribution. By assuming status-dependent preferences that are non-homothetic, we show that income inequality differential can be a basis for inter-industry trade between otherwise similar economies.


2021 ◽  
pp. 135406612110014
Author(s):  
Glen Biglaiser ◽  
Ronald J. McGauvran

Developing countries, saddled with debts, often prefer investors absorb losses through debt restructurings. By not making full repayments, debtor governments could increase social spending, serving poorer constituents, and, in turn, lowering income inequality. Alternatively, debtor governments could reduce taxes and cut government spending, bolstering the assets of the rich at the expense of the poor. Using panel data for 71 developing countries from 1986 to 2016, we assess the effects of debt restructurings on societal income distribution. Specifically, we study the impact of debt restructurings on social spending, tax reform, and income inequality. We find that countries receiving debt restructurings tend to use their newly acquired economic flexibility to reduce taxes and lower social spending, worsening income inequality. The results are also robust to different model specifications. Our study contributes to the globalization and the poor debate, suggesting the economic harm caused to the less well-off following debt restructurings.


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