Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States

TL;DR

This paper analyzes wealth and income distributions in the UK and US, revealing that most of the population follows an exponential distribution while the high-income tail follows a power law, characterized by a scale parameter.

Contribution

It provides empirical data showing the dual nature of wealth and income distributions across different regions, with a focus on the exponential and power-law behaviors.

Findings

Majority of population follows exponential distribution

High-end tail follows a power law

Distributions characterized by a temperature-like scale

Abstract

We present the data on wealth and income distributions in the United Kingdom, as well as on the income distributions in the individual states of the USA. In all of these data, we find that the great majority of population is described by an exponential distribution, whereas the high-end tail follows a power law. The distributions are characterized by a dimensional scale analogous to temperature. The values of temperature are determined for the UK and the USA, as well as for the individual states of the USA.