Open Access

The Income Gini of Fairness

Ophir Flomenbom

Flomenbom-BPS Ltd, 19 Louis Marshal, Tel Aviv 62668, Israel

E-mail Address: ophir1974@flomenbom.net

https://doi.org/10.1142/S2424942417400047Cited by:3 (Source: Crossref)

Abstract

We are in favor of wealth accumulation in a free and democratic nation. Yet, the question is whether the mechanism of wealth accumulation is the same to all the people or are there different mechanisms to different socioeconomic-groups, therefore unfair biases in the nation. Here, we would like to develop ways to quantify and fight there unfair distortions. Utilizing methods from socioecono-physics, we find that in a democratic and a free nation, a fair society is such that the income distribution’s Gini is in the range, 25% and 33%, 34%. (Gini is the departure of the distribution from the “all are equal” distribution). The value, Gini $\approx 40$ %, is indeed the transition from the intermediate stage nation to the corrupt nation, where Gini $\leq$ 40% requires that the income distribution is smooth in the top percentiles (rather than a jump like formed). Therefore, the effect of the 0.1% excessive wealth is pivotal to the problem; such nations have Gini values beyond 40%. The wealth distribution’s properties further strengthen these findings.

We develop a dynamical model that is emphasizing the difference in the environment of the two camps: the top and the rest, yet find that interactions create a smoother income density.

We therefore think that the income distribution’s Gini $\approx 40$ % is the alarm stage, yet the Gini should better follow the middle range of the fair society stage (25% through 33%) rather than the upper bound in that stage, where ways to realize that are elaborated on.

Keywords:

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Vol. 01, No. 01

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History

Received 27 April 2016

Revised 29 August 2016

Accepted 19 December 2016

Published: 4 April 2017

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This is an Open Access article published by World Scientific Publishing Company. It is distributed under the terms of the Creative Commons Attribution 4.0 (CC-BY) License. Further distribution of this work is permitted, provided the original work is properly cited.

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The Income Gini of Fairness

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