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Saturday, November 27, 2010

Authorship: A Winner-Take-All Game

Ever heard of the Gini Coefficient?  Invented by Italian statistician Corrado Gini in 1912, it's a mathematical tool used to measure the inequality of a statistical dispersion.  When a group of numbers has a high Gini Coefficient (approaching the theoretical maximum of 1.0), the numbers are widely scattered from very high to very low.  By contrast, when the Gini Coefficient is low (approaching the theoretical minimum of zero), it means that the numbers tend to cluster close together.

The most common use of the Gini Coefficient is to measure income inequality within a population.  In a country with a low Gini Coefficient, very few people are either really poor or really rich; instead, most people are middle-class.  Sweden happens to have the world's lowest Gini Coefficient, at 0.23.  By contrast, a country with a high Gini Coefficient has a few very rich Haves and a lot of very poor Have-Nots.  The high end of the scale today is Namibia, with a Gini Coefficient of 0.70.

What does all this have to do with the book business?  I'm so glad you asked.

I just read this 2005 study about the economics of book authorship in the U.K. and Germany, sponsored by the Authors Licensing & Collecting Society (ALCS), which is in charge of gathering copyright fees due to book authors as a result of, for example, photocopying (a system which if course we don't have in this country).  The ALCS study surveyed some 25,000 professional writers and came up with some rather depressing but predictable information--for example, that "The typical income for a professional author is one third below the national average wage," and that "The earnings of a typical writer are deteriorating in real terms."

But what I found most interesting, because I'd never seen it calculated before, was the Gini Coefficient among book authors.  It stands at 0.74--higher even than Namibia and basically off the scale as far as inequality is concerned.  (For a comparison, among metal and electrical workers, the Gini Coefficient is 0.22--even more egalitarian than Sweden.)  This reflects the fact that, as the report's authors say, "The top 10% of authors earn more than 50% of total income, while the bottom 50% earn less than 10% of total income."

In other words, we have here hard data supporting what you may have long suspected--that a relative handful of authors enjoy the bulk of the rewards of the profession, while thousands of others labor largely in vain.  And this situation seems to be intensifying over time: ALCS found that the Gini Coefficient had actually increased from 0.60 to 0.74 in just five years (from 2000 to 2005).

I'm not aware of any similar study of American authors, but I wouldn't be surprised if our Gini number was even more extreme, especially since recent Census data show that the overall distribution of assets in our society is now more heavily skewed toward the wealthy than at any time since the 1920s.

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