

Subject:
what are the exact statistical odds of this happening as in 1 in ______________
Category: Business and Money Asked by: gapgapgapga List Price: $200.00 
Posted:
01 Oct 2004 06:32 PDT
Expires: 31 Oct 2004 05:32 PST Question ID: 408852 
male born in 1963 who dropped out of high school now earns $5,000,000.00 per year and has a net worth in excess of $20,000,000.00 I need the exact answer  
 


Subject:
Re: what are the exact statistical odds of this happening as in 1 in ______________
Answered By: pafalafaga on 01 Oct 2004 13:34 PDT 
gapgapgapga, OK. Here goes: There are 186,876,000 people over the age of 25 in the workforce in the United States. I mentioned earlier that 60,000 of these earned $100,000 a year or more despite having dropped out of high school. Obviously, a much smaller number than 60,000 are worth $20 million or more. And a smaller number still are worth $20 million AND are men AND were born in 1963. But how small a number is that...? Here's a pretty good estimate, based on several available statistics: There were (in 2003) 21,530,00 men in the workforce who were 3544 years old (that is, 21.53 million men born between the years of 1959 and 1968). Of these, 1,862,000 were high school dropouts, and Of these, 14,000 of the dropouts earned $100,000 per year or more. The IRS has estimated that, among the wealthy people in the US, only 0.4% of millionaires have a worth of $20 million or more. Let's assume that  for those earning $100,000 a year or more (many of whom are not yet millionaires)  the percentage is a good bit less; say 0.1% (That is, only 1 out of a 1,000 people earning $100,000 or more are worth $20 million or more). So to recap: There are 14,000 men in the age range 3544 who dropeed out of high school, and who earn $100,00 per year or more. Only 0.1% of this group  14 men  would be expected to be worth $20 million or more. However, these 14 are strewn over a ten year time period (born between 1959 and 1968). So...only onetenth of the group would be expected to have been born precisely in 1963. That is, statistically speaking, there are only 1.4 men in the US who were born in 1963, dropped out of high school, and are now worth $20 million or more! Rounding off, we can say there's only one person in the country who fits this description (someone you know, I take it???). In terms of the over25 US workforce, then, the odds are 1.4 in 186.9 million  or 1 in 133 million  that someone meets your specific criteria. Q.E.D. ==================== You'll want to know, I'm sure, where these numbers come from. I pulled them out of three key sources (none of them parts of my anatomy, by the way): http://ferret.bls.census.gov/macro/032004/perinc/new03_000.htm PINC03. Educational AttainmentPeople 25 Years Old and Over, by Total Money Earnings in 2003, Work Experience in 2003, Age, Race, Hispanic Origin, and Sex Both Sexes, 25 Years and Over, All Races This table provides an overview of the workforce subdivided by income and education. ===================== http://ferret.bls.census.gov/macro/032004/perinc/new03_000.htm PINC03. Educational AttainmentPeople 25 Years Old and Over, by Total Money Earnings in 2003, Work Experience in 2003, Age, Race, Hispanic Origin, and Sex Male, 35 to 44 Years, All Races This table gives the more detailed breakout for the population of men aged 3544. =================== http://www.irs.gov/pub/irssoi/98pwart.pdf Personal Wealth, 1998 Table 1.Personal Wealth, 1998: Type of Property by Size of Net Worth This table provides the distribution of wealth among the wealthy. Although the data are a bit dated, I dont have reason to suppose the distribution has changed all that much in the past 56 years. ================== Well, this has been fun, but I'll certainly understand if you have questions, or want additional clarifications. If so, just post a followup comment, and I'll be happy to assist you as best I know how. And please give my regards to Mr. OneInAHundredThirtyThreeMillion! pafalafaga  
 
 


Subject:
Re: what are the exact statistical odds of this happening as in 1 in ______________
From: probonopublicoga on 01 Oct 2004 06:53 PDT 
1 in a million. Can't be more precise because I don't know how many people were born in 1963. 
Subject:
Re: what are the exact statistical odds of this happening as in 1 in ______________
From: zeroaffinityga on 04 Oct 2004 23:09 PDT 
Here's a different take on your question. I've broken it into two parts, those people satisfying the income portion in Part I and those satisfying the net worth portion in Part II. The product of both represents the intersection, what you are almost interested in. Part I There is a .00902% chance of picking a male, aged 41, with a job, who did not complete high school out of the population. [26559/US_POP] Notes for Part I The age is assumed to be uniformly distributed over the 3544 age bracket. Men with jobs is chosen because you used the language "...now earns $5M..." and you have to have a job to earn. US population (US_POP) is taken to be 294,440,200 from US Census site. This does not take into consideration the actual amount of income. There is a note on that below. Part II First, let's put net worth in perspective. The man with the most net worth in the country rings in at $48B; the 369th richest person has $800M. Based on simple trending, you will hit the $20M net worth mark around the 40,000th ranked person. Therefore, 0.01358% of the population has $20M in the bank. [40000/US_POP] Notes for Part II Trend line was created using "power" smoothing forecasted by 1000 units based on the first 367 data points. Trend line equation is given as Net Worth = 95.848(Rank)^.8001 Putting It All Together The likelihood of picking a male, aged 41, with a job, who did not complete high school out of the population is .0000902 and the likelihood of picking someone with a net worth of $20M or greater out of the population is .0001358. The likelihood of picking someone out of the population with both sets of characteristics is simply .0000902 x .0001358 = .000000012249. Slim chance indeed. In other words, there is a 1 in 81,638,251 chance ... if high school completion and net worth were not correlated. However, I would venture to say that education and net worth are positively correlated through at least the "some college" category and this would skew the chances of finding your high school dropout towards the unfavorable side. Last but not least, there is the $5M income parameter. I didn't even bother to estimate this because assuming that income is normally distributed, the chance of someone earning that kind of income is very small. But if you want a ballpark estimation of the effect of factoring this kind of income against the more scientifically valid number above, I'd say your chances are close to 1 in a billion. Other Notes Male income by education http://www.census.gov/hhes/income/earnings/call1usmale.html Net Worth http://www.forbes.com (400 richest americans) I hope this helps. Chris 
Subject:
Re: what are the exact statistical odds of this happening as in 1 in ______________
From: gapgapgapga on 08 Oct 2004 10:44 PDT 
Chris, I will pay you another 200 if you do it the same way but use income and dont allow for gender. 
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