Income inequality analysis and visualization

Recently, I did some analysis of the income inequality data found from the world income inequality database and the US government historical income inequality data.

And I was amazed to find some insights through this process. The above is the tableau interactive notebook you can play with. Here I will just list the main findings of the data:

For US government data:

And although I also don’t believe the official inflation rate truly reflect the actual number of inflation, but even let us take it as it is, I am stilled shocked by how the actual income of most people are stagnating over the past 40 years. If you want to know more about the inflation information, I recommend you to check the Shadow Statics about alternative measure of different economic indicators like inflation, unemployment, GDP etc.

For other countries, I also find some interesting points:

Actually, the “richer get richer while poor get poor” can be show in a very simple model in netlogo. In this “simple economy” model, we just need to initialize an amount of people and each with a fixed amount of money. In each round, one person just randomly select another person and give him/her one coin. So this is a extremely simple simulation of the economy system, there is on creation of new things, no money printing etc. But even in this ideal world, we could actually see inequality occurs.

When the system is running and running, we can notice that the top 10 richest people get more and more money while the amount of the bottom 50 are less and less which means some people just accumulate a lot of wealth totally by lucky and the system become less and less equal overtime. It can be shown as in the following image which record the running of the model:

NetLogo Simple Economy Model

And very interesting, the distribution of the wealth change from like a normal distribution at the beginning to right skew and then finally to a exponential like distribution in the late phase. So it means in this really simple economic world, income inequality could happen, and I believe all the thing like Quantitative Easing just aggravate the inequality of the world.

This is an interactive notebook and you can play with the data by selecting different filters. And I find it is normally more useful to use visualization to show interesting phenomena than plain numbers. If you find some other interesting things, you’re welcome to comment after the post :).

m00nlight 24 November 2018
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