Dear gapgapgap,
Please note that some of the assumptions and procedures in the following
computation are open to dispute. Due to the variety of subjective and
objective approaches that one can reasonably adopt, different people
will arrive at different results. What I offer is one of many different
lines of reasoning one might use to arrive at an answer. If you disagree
with the method detailed below, I am open to discussing it and revising
it before you rate my answer.
To compute the odds you are looking for, we must first determine how many
American males were born in 1963. We shall limit our attention to the
United States because economic opportunities are not the same in other
countries. If the male you have in mind was not, in fact, born in the US,
please advise me so that I can adjust the calculations.
According to the National Center for Health Statistics, there were
4,098,020 live births in 1963.
NCHS: Vital Statistics of the United States
http://www.cdc.gov/nchs/datawh/statab/unpubd/natality/natab98.htm
NCHS: ive births, birth rates, and fertility rates, by race of child:
United States, 1909-80 [PDF file]
http://www.cdc.gov/nchs/data/statab/t981x01.pdf
Although I have not found a breakdown by sex for births in that
year, we can arrive at a close estimate by extrapolating from current
sex-distribution statistics. In the year 2000, when people born in 1963
were about 37 years old, Americans in the 35-39 age group composed 8.07%
of the total population. Males accounted for 4.02% of this, making a
ratio of
4.02 / 8.07 = 0.49814 = 49.814% .
Thus, we can estimate confidently that there were
0.49814 * 4,098,020 = 2,041,388
or about 2,040,000 American males born in 1963.
University of Michigan: CensusScope: United States Distribution
http://www.censusscope.org/us/chart_age.html
Let us suppose that our male was 16 years old when he dropped out of
high school in his junior year, although you should feel free to correct
these details if they do not meet the facts of the case. At any rate,
the figures will not differ much in the vicinity of this year, grade,
and age group. According to the US Census, there were 102,000 male
16-year-old dropouts from Grade 11 in 1979.
US Census: Annual High School Dropout Rates of 15 to 24 Year Olds by Sex,
Race, Grade, and Hispanic Origin: October 1967 to 2004
http://www.census.gov/population/socdemo/school/TableA-4.xls
To compute the odds of dropping out, we divide the number of dropouts
by the number of males in this age cohort.
102,000 / 2,040,000 = 0.05 = 5%
So the odds of this American male becoming a dropout are 5%, or 1 in 20.
Now let us turn our attention to the matter of net worth. Although I
was unable to find empirical figures for individuals worth $50 million,
we can extrapolate from other figures using the well-established Pareto
Law of wealth distribution. We should also note that it is meaningless
to consider the probability of being exactly 43 years old with a net
worth of exactly $50 million, since the number of individuals meeting
that precise description is negligible or zero. Thus, we shall consider
the probability that someone who is no more than 43 years old is worth
at least $50 million.
According to Forbes magazine's 2006 billionaire rankings, there are 18
Americans no greater than 43 years of age whose net worth is at least
a billion dollars.
Forbes: The World's Richest People, 2006: Sort by Age
http://www.forbes.com/lists/2006/10/Age_1.html
To scale this figure down to the $50 million group, we use the fact that
wealth is distributed according to Pareto's Law among the wealthiest 3%
of society.
The wealth of the super-rich follows Pareto's Law: the number of
people having wealth W is proportional to 1/W^e, where e is always
between 2 and 3. [...] 3% of people's wealth follows Pareto's Law.
New Scientist: Why it is hard to share the wealth
http://www.newscientist.com/article.ns?id=mg18524904.300
The Pareto distribution gives the probability that a person's
income is greater than or equal to x and is expressed as:
Pr[X >= x] = (m/x)^k, m > 0, k > 0, x >= m,
where m represents a minimum income.
Hewlett-Packard: Zipf, Power-laws, and Pareto: Appendix 1
http://www.hpl.hp.com/research/idl/papers/ranking/ranking.html#ap1
We are considering the population of males no older than 43, which,
according to the CensusScope data cited earlier, makes up close to 34%
of the total American population, or
.34 * 296,500,000 = 100,800,000
which is about 100 million. The figure of 296,500,000 comes from a
non-profit organization called the Population Reference Bureau.
Population Reference Bureau
http://www.prb.org/
So the proportion of billionaires in this population is 18 per 100
million. Using a minimum income of m = $1 and setting x = $1 billion,
Pareto's Law says that the probability of being a billionaire in this
group is
(1 / 1,000,000,000)^k = 18 / 100,000,000
(1 * 10^-9)^k = 1.8 * 10^-7
(1 * 10^-9)^0.75 = 1.8 * 10^-7 .
Using the implied value of k = 0.75, we compute the probability of having
a net worth of at least $50 million within this group as
(1 / 50,000,000)^0.75 = 1.68 * 10^-6
= 0.00000168 .
So the chance of a 43-year-old American male achieving this kind of wealth
is 0.000168%, which is much slimmer than the 5% high-school dropout rate
in his age cohort.
As for the combined probability of these two events -- dropping out and
acquiring a net worth of $50 million -- we must consider the influence
that one has on the other. If we assume that dropping out of high school
has no influence on one's earning power, the joint probability is the
product of the individual probabilities:
0.05 * 0.00000168 = 0.000000084
= 1 / 12,000,000 .
However, it is not true that someone who drops out of high school has
the same economic opportunities as someone who stays in school. While
the effect of dropping out cannot be precisely quantified, especially
for this age group and income level, we shall use as a rough estimate
the fact that young men who did not earn a high-school diploma earn 27
percent less than those who did.
Men and women aged 25?34 who dropped out of high school earned
27 and 30 percent less, respectively, than their peers who had
a high school diploma or GED.
Public Broadcasting System: Society & Community: Starting From Behind
http://www.pbs.org/now/society/dropouts2.html
If dropouts earn 27 percent less, or only 73 percent of what high-school
graduates earn, then we might say that their probabilistic share of
every dollar is
0.73 / 1.73 = 0.422
so we multiply the odds by this factor to obtain
0.422 * 0.000000084 = 0.000000035
= 1 / 28,000,000 .
In conclusion, I estimate that the odds are 1 in 28 million that an
American male dropout born in 1963 is worth $50,000,000 today.
It has been an interesting challenge to answer your question. If you
have any concerns about the completeness or accuracy of my research,
please advise me through the Clarification Request feature and give me
the opportunity to fully meet your needs before you rate this answer.
Regards,
leapinglizard
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