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Zipf's law: the study of innate correlations

(PhysOrg.com) --Studying the patterns that emerge in natural and social phenomena is a popular area of research, although usually individual phenomena are studied separately from each other. In a recent study, researchers have found innate correlations among some of these phenomena, showing that the amount of money that individuals in a society donate to a charity can be used to determine the distribution of personal wealth in that society. The connection between these two topics can also be used for exploring the complexity of a society's economic system.

Zipf’s law quantitatively describes how the most common entities of a set (such as the common word “the”) appear with a high frequency that logarithmically tapers off as entities become less common. The same power law holds true for the distribution of population sizes, Internet traffic, and other phenomena. As researchers have previously found, in some cases the law stems from a competition among individuals for a constraint resource.

Since wealth distribution has also been known to follow Zipf’s law. Their model shows that only a portion of the individuals in a society have a desire to donate, and of these, each individual donates a portion of his or her overall wealth that is random but uniformly distributed. Even though only a small sample of the donators in the case of the Sichuan earthquake was collected and analyzed, the researchers’ model could generate the distribution of personal wealth throughout China, which is consistent with what has been obtained from the data of the richest 500 individuals in China.

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Posted By: Dylan
11/17/09 07:18 PM

I swear to god I left a really long comment on this....
Posted By: Dylan
11/17/09 07:27 PM

Anyway, to summarize my invisible comment, I don't really understand why these types of studies are valuable. It is always interesting to match socio-economic phenomena to an already familiar type of statistical curve, however could the same analysis not be done by counting the expensive cars on the road of a given country, or the number of luxury homes sold, etc? We already know there is a lopsided distribution of wealth in almost all societies, and thus spending behaviours (such as donations) will follow. I can't really imagine a situation wherein we have so much data on the spending habits of a society without also knowing the overall distribution of wealth anyway. I think the more interesting question is: how well do societies function when you compare the different wealth distributions in the first place? And does a more uniform distribution really make for a better functioning society?
Posted By: Michael
11/17/09 08:32 PM

why do you hate ratios so much, Dylan?
Posted By: Dylan
11/17/09 09:24 PM

You just had to play the ratio card.