I find it hard to take this sort of analysis seriously, when the authors admit that they don't even understand the order of magnitude of the error bars on the data.
Not to mention that the regulatory landscape has changed over time, and since that directly influences several classes of errors (from waiters under-reporting tips to "the 1%" hiding money in now-illegal tax shelters) estimating historical trends is an exercise in futility.
And we effectively have no way to benchmark how well these different studies are doing at measuring the underlying phenomena that they're trying to measure, this is really just making up numbers and calling it "wealth distribution".
this is really just making up numbers and calling it "wealth distribution".
We can go deeper. Almost everything you hear about the "economy" is based on a mathematical model that makes a variety of assumptions. What is income? What is wealth? Who are the people participating? How does information get transmitted? What is a "good" outcome and what is a "bad" outcome?
Further, "waiters undereporting tips" is a tiny problem next to "wealth is somewhat unmeasurable since we don't survey it or tax it".
The best we can do is measure what we can and try to make reasonable inferences. But it's not an exercise in making up numbers. It's an exercise in interpreting what the numbers we have are saying.
Comments
I find it hard to take this sort of analysis seriously, when the authors admit that they don't even understand the order of magnitude of the error bars on the data.
Not to mention that the regulatory landscape has changed over time, and since that directly influences several classes of errors (from waiters under-reporting tips to "the 1%" hiding money in now-illegal tax shelters) estimating historical trends is an exercise in futility.
And we effectively have no way to benchmark how well these different studies are doing at measuring the underlying phenomena that they're trying to measure, this is really just making up numbers and calling it "wealth distribution".
Welcome to problems with social science!
We can go deeper. Almost everything you hear about the "economy" is based on a mathematical model that makes a variety of assumptions. What is income? What is wealth? Who are the people participating? How does information get transmitted? What is a "good" outcome and what is a "bad" outcome?
Further, "waiters undereporting tips" is a tiny problem next to "wealth is somewhat unmeasurable since we don't survey it or tax it".
The best we can do is measure what we can and try to make reasonable inferences. But it's not an exercise in making up numbers. It's an exercise in interpreting what the numbers we have are saying.
I assure you, "waiters under-reporting tips" is a mere rounding error compared to the money hidden in tax shelters; their legality notwithstanding.