3.5. 51 Ratios of Top Incomes over U.S. Mean: Between-State Inequality

There are 51 inter-state inequality ratios, one for each state and one for the District of Columbia. These ratios divide the per-household income of state i’s top fractiles by the national average of per-household income. Converted in 2003 dollars, the national income used from 1913 to 2003 comes from Piketty and Saez’s series, as it is already corrected with all necessary adjustments. As well as an indicator of inter-state inequality, this ‘convergence ratio’ parallels Piketty and Saez’s income shares whose fluctuation interval ranges from 0 to 1. Piketty and Saez’s income shares represent the percent weight of top incomes in total income. ²⁴ Here, however, the top income per household is divided by the national income per household (not total income), and therefore most of the ratios exceed unity. The few ones that lie within unity are the states where the richest per household incomes did not go past the level of the national average; this particular case typically happened in the early years of the time-period 1913-2003.