In the News
News about the Chancy Islands:
What’s luck got to do with it? When it comes to money, quite a bit, by Pedro da Costa, Economic Policy Institute – Working Economics Blog, September 17, 2019.
Short introduction to and summary of the Chancy Island website.
Probit and Wealth Inequality: How Random Events and the Laws of Probability Are Partially Responsible for Wealth Inequality, by Randy Schutt, CHANCE, American Statistical Association and Taylor & Francis, 35:1 (February 2022), 18-25.
Abstract: Even in a group of people who are identical in every way and are only subject to random costs and benefits, the distribution of wealth will be nudged towards taking the shape of the normal distribution’s cousin, the probit, with its very unequal allocation. The larger these random costs and benefits are and the more frequently they occur, the more severe inequality will become. Furthermore, because the probit curve has asymptotic curls at the extremes, those in the 99th percentile or greater will be significantly richer than those at the 95th percentile and those at the 1st percentile or less will be notably poorer than those at the 5th percentile. If a society values fairness, then it must in some way mitigate the wealth inequality caused by these natural events and not let the whims of luck and the quirks of probability bestow vast riches on a few people and dire poverty on others. Color version of this article.