Wednesday, February 21, 2007

Bias against the rich takes another knock: We all know that if your born into a rich family, your future is guaranteed, right? Some Americans go from rags to riches, but Daddy will make sure the opposite never happens. The General Social Survey asked respondents about their occupations and those of their fathers. I looked at the 262 men whose fathers had prestige scores in the top 10%. If the "silver spoon" hypothesis is correct, all these guys should have prestige scores at least as high as Pop's. On the other hand, if the process were purely random, only 10% of the sons would equal Dad's accomplishments. So what do the data tell us? Only 26.4% of these guys equalled or surpassed their childhood status. Basically three-quarters of them were riches to rags (well, not rags usually, but you get the picture).

Of course, a person is not surprised by this if he is familiar with the idea of the regression to the mean, but in our innumerate society, few are. (By the way, "he" was used intentionally in the last sentence).

(And don't think that I'm some richie trying to defend my class: I'm the son of a maintenance man.)

8 comments:

Gary said...

I'd bet that a lot of the "riches to rags" types are Baby Boomers whose old men came of age immediately after WW II. Back then, if you went to college on the GI Bill, you were practically guaranteed an upwardly mobile, comfortable suburban life with all the trappings.

Put another way, back in 1958 $100K could buy you a mansion in the best part of LA (or close to it) - inflation has driven that same $100K up to $692K, which in today's So Cal gets you a middle class house in a middling neighborhood.

By that yardstick, your old man's accomplishments can look pretty impressive.

Jim Bowery said...
This comment has been removed by the author.
Jim Bowery said...

The problem isn't with your analysis so much as your assumption about what "we all know".

Bill Gates is not the richest man in the world because he was the son of a relatively well-to-do businessman, although he was. He is the richest man because he pursued and locked in the platform via which third party software interoperated. Although he did other things he did primarily simply collect economic rent. Once the fix was in with IBM to distribute MS DOS on their original PC, the government could have stepped in and reassigned ownership of Microsoft to just about anyone in the software industry and that person would have become the world's richest man.

This is only solvable by switching the tax base from economic activity to a use fee for property rights assessed at the value under eminent domain -- or by destroying the civilization which upholds bogus notions of status.

PS: "The Boomers" are two radically different demographies -- the Boomers who got in on the real estate boom and the Boomers who got hit by the 19% fix rate interest rates of the early 1990s. It is the latter group of "Boomers" who were the majority. This is reflected in the interminable parade of early Boomers occupying positions of authority, most notably the White House.

Ron Guhname said...

Keep in mind that I looked at prestige scores based on the type of job you have, not such things as real estate, wealth, or income. Three-quarters of the sons ended up with a lower status job.

Jim Bowery said...

I was responding to the idea that 'we all know' that old money is the beneficiary of the subsidy of wealth inherent in any civilization that doesn't tax wealth.

My point is that it isn't old money so much as economic rent that is the heart of this myth, and that new money may simply be better at rent seeking.

However, to your technique of using occupation rather than wealth as the proxy:

What you are really measuring is the degree to which the upper middle class and lower upper class are subject to intergenerational variations. A lot of highly wealthy people don't ever bother with a "vocation" per se -- which isn't to say they are idle.

Anonymous said...

I'm the product of four generations of downward mobility, but I'm still worth a million bucks.

John Bragg said...

I think that a combination of regression to the mean with inherited advantages would lead us to expect that the Children of Privilege would average somewhere above the general mean of their generation but below the mean of their privileged parents.

Making up numbers, if the mean for a generation is 100, and we looked at the children of parents who averaged 120, I'd expect the mean for the children to be somewhere around 110, 115. Is that close?

Anonymous said...

I want to know the statistics for the actual rags to rich's score, the percentage of people who came from the bottom 10, 15 or 25% and ended up in top 10%. Also, some arbitrary "prestige score" based on a persons fathers profession may or may not be a very misleading poll. Also, leetfact, were you aware that 9000% of polling data contains factual innaccuracies? I'm sure you weren't. The data I have seen on this blog seems to contain a number of generalizations stemming from small sample sizes of individuals. I think the author of this shitty blog wants to be a freakanomics style "rogue economist" who isn't afraid to look at the numbers, but who also is looking to confirm a lot of his own biases. Shithead retards who use psychometric data to make generalizations about groups of people are normally trying to confirm there own biases, while seeming to be impersonal by pointing to "facts". If I were you, I'd start to look below the surface of some of these super simple overgeneralizations and look at causal reasons for why people are the way they are instead of treating data like it is conclusive or static, and as though it represents anything other than information that was true at a particular cross section in time. You seem smart, but not quite smart enough to realize that this type of simplistic "human analysis" can breed a lot of hatred and ignorance. GG. And just so I can establish my IQ credentials, because that seems to be the only measure of intelligence accepted on the internet, I'm a member of John's Hopkins Study of Exceptional Talent (all caps for iqsnob purposes!), for mathematical ability. peace nucca