Example of Unequal Distribution, shown as Wealth but could be

income, before or after tax and redistributions

Tenths’ Labels Wealth of each 10th Cum. Wealth

Wealthiest
Tenth 10 28 100
Net wealth 9 20 72
Wealth owned by richest
of 28% of 8 15 52 5 tenths (Top 50%) = 85%
total
wealth 7 12 37
6 10 25
5 8 15
4 4 7
3 2 3 Wealth owned by bottom 5
tenths (Bottom 50%) =15%
2 1 1
Poorest
Tenth.
1 0 0
Net wealth
of zero.
 Gini Coefficient Example A X
Cumulative 100
Wealth of
Population 90 Gini Coeff. = Hatched area/Area
of Triangle OAB
80
In this example, Gini Coeff = X
70 approx. .45
10 28 100 60
9 20 72
8 15 52
7 12 37 50 X
6 10 25
5 8 15
4 4 7 40
3 2 3
2 1 1 X
1 0 0 30
X
20
X
10
X B
X
0 X X
10 20 30 40 50 60 70 80 90 100
Origin O
Cumulative % of Population
 Wikipedia page definition of Gini Coefficient
If xi is the wealth or income of person i, and there are n persons, then the Gini coefficient G is given by:

When the income (or wealth) distribution is given as a continuous probability distribution function p(x),
the Gini coefficient is again half of the relative mean absolute difference:

where is the mean of the distribution, and the lower limits of

integration may be replaced by zero when all incomes are positive.
Watch the interview of Walter Scheidel, author of The Great
Leveler (sic), by Michael Shermer at
https://www.youtube.com/watch?v=r93ZZKnRu68

Start at 4.00 minutes and run to 35.24 minutes

for the main points.
Summary of The Great Leveler (sic)

Four ‘horsemen’ do the levelling.

Inequality declines during-

1. Mass mobilisation for warfare (WWI and WWII)

2. Transformative revolutions (Bolshevik Revolution)

3. State Failure (collapse of Western Roman and Tang empires)

4. Lethal pandemics (14th century European ‘Black Death’)

 19th Amendment to US Constitution 1920

The right of citizens of the United States to vote shall

not be denied or abridged by the United States or by
any State on account of sex.

Congress shall have power to enforce this article by

appropriate legislation.

The equivalent law was enacted in NZ in 1893

 Change in relative wealth of top 10% in Western world during 20th Century war period
50

45
. o
o
o Top 10% Income
share: US

. .
o
o
40
o
o
Top 10% Income
35
. o o
o
. . share: Europe

. . .
30
. . Adapted from Why people prefer
unequal societies by Christina
Starmans, Mark Sheskin and Paul
Bloom. Nature: Human Behaviour 7th
APRIL 2017 | VOLUME: 1, No:
0082.

25 Data from Piketty, T. & Saez, E.

(2014). Inequality in the long run.
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 Science 344, 6186, pp. 838-843.
Some International Comparisons from CIA World Fact Book

Ranking Country Gini Coeff X 100 Date

1 Lesotho 63.2 1995

2 South Africa 62.5 2013 est.
6 Namibia 59.7 2010
9 Hong Kong 53.9 2016
15 Chile 50.5 2013
21 Nigeria 48.8 2013
26 Honduras 47.1 2014
30 Cameroon 46.5 2014 est.
31 China 46.5 2016 est.
32 Malaysia 46.2 2009
33 Malawi 46.1 2010
38 Singapore 45.9 2017
49 Israel 42.8 2013
57 Russia 41.2 2015
84 Indonesia 36.8 2009 Source: Perry (2015a), Ministry of
89 New Zealand 36.2 1997 33 2014 Social Development, using data from
Statistics New Zealand's Household
133 Australia 30.3 2008 Economic Survey, OECD
145 Germany 27 2006
153 Sweden 24.9 2013
 Countries' income inequality (2014) according to their Gini coefficients measured
in percent: red = higher than average, green = lower than average inequality.

https://en.wikipedia.org/wiki/List_of_countries_by_income_equality
Brian Easton: http://briefingpapers.co.nz/house-prices-relative-to-inflation/
Summary of researches documented in Why people prefer unequal societies by
Starmans, Sheskin and Bloom.

Equality Fairness
Laboratory studies and impersonal/abstract surveys

Recipients are very few in number or are homogeneous

These show a bias towards equal distribution of resources, even at the cost of
1. Wasted resources or
2. imposition of costly punishment
Fairness = Equality so equality of outcome is required.

Real World Studies

1. Unequal distribution of resources is preferred,

if initiators, makers, creators, hard workers, “bad” people are among the recipients.
(“Bad” people are selfish/harmful/free riders)
2. This finding true for adults, children and even toddler participants.
3. Degree of unfairness tolerated/preferred is cultural and personality type dependent.

Equality of outcome not required - not even preferred

Counter measures

Universal Basic Income (experiments current in Barcelona, Helsinki and

Utrecht. More to take place in Ontario, Oakland and Uganda)

Variable GST (lower on basics. This is the case in Australia)

More progressive income taxes (first tranche of earned income to be tax free?)

Inheritance tax

Capital Gains tax (Currently proposed by Government Tax Working Party)

Wealth (Capital) tax (proposed by Piketty and Gareth Morgan as part of TOP
policy. Incorporated into Tax working party CGT as tax on increase in value
due to inflation)

Financial Services tax

Reference

Christina Starmans*, Mark Sheskin and Paul Bloom (2017).

Why people prefer unequal societies.
Nature Human Behaviour. Perspective, April 2017, Volume 1, article 0082

Accessible at
https://www.researchgate.net/publication/315944588_Why_people_prefer_unequal_societies

There are many references in this paper that are worth accessing if practical. I recommend
references 23 and 60.