The 1%, Whomever they Are

I have been reading the many folks writing on this 1% issue. I read Tyler Cowen's piece today which rambled around and about the issue. I wrote a few pieces a couple of years ago looking at income inequality and I came up with an interesting question.

"What percent of your friends, family and associates are in the 1%"

Now depending on that answer one can ask the next question:

"What is the probability that you are in the 1% given that x% of your friends etc are in the 1%"

One would suspect that say 5% of your friends etc are in the 1% that perhaps you are also. But not necessarily.

For example, there are people in the 1% who have few friends in the 1%. I would guess there are few of these people but they may exist. Then again if you have 50% of your friends in the 1% the chance that you were also could be quite high, really high, unless for some reason they just want to know you.

Thus the clustering of the 1% may be an interesting phenomenon to analyze. Perhaps the 2%, 5% and 50% as well, but I suspect it breaks down quickly. Also this could be an interesting mathematical problem.

But again, the 1% are also self segmented. Entrepreneurs cluster with entrepreneurs, look at Silicon Valley, Cambridge, and bankers cluster with bankers, ie Wall Street, and big CEOs all pall around together, look at well you know, and then there are the Sopranos,you see I live in New Jersey.

I would suspect that the 1% is itself inhomogeneous, spread out all over. So is the complaint about Wall Street, large company CEOs, sports figures, movie stars, entrepreneurs, Soprano types, just who?

The more one thinks of this issue the less focused it becomes.