The Ultra High Net Worth (UHNW) Cities Where the Wealthiest Americans Live

Analysis of the per capita trends

As I continued my analysis of the 2013 Forbes Billionaires List, see Refs. [1-5] in the list of the recently the completed articles which are uploaded at this website, I came across an interesting article by Brendan Coffey (click here, see also Ref. [6]) which provides the following list of the top 10 cities in the US where the wealthiest live. Not surprisingly, New York City heads this list with 7,720 Ultra High Net Worth (UNHW) people, which is about 13% of the US total of estimated UNHWs, at 57,860. And, heres the clincher which got me going with this short article: NYC is also the densest with the very rich, with just about 9% of the total US population. In other words, we are again consider the per capita distribution of the UNHW across various American cities, just like we have been discussing the worldwide distribution of the 1426 billionaires across 64 countries, see the references cited. Intrigued by the Coffey list, I decided to compute the per capita distribution of the UNHWs in these top cities to see if we observe trends similar to those observed with the per capita distribution of billionaires, see recent article in Slate magazine by Emma Roller, Ref. [7]. The population figures for the ten cities could be obtained readily from the three sources cited as Refs. [8-10] which provide the estimated populations for 2010 and 2011. The values given in Table 1 are from Ref. [8] and are also in agreement with the estimates in the two Wikipedia articles, Refs. [9,10]. Let x denote the population and y the number of UHNW individuals. The per capita ratio y/x, the number of UHNW individuals per million of population is given in the last column. The cities are listed in the upper half of Table 1 by increasing population. However, no clear trend in the number of UNHWs is obvious. Re-sorting the data by the per capita ratio, we see a consistent trend
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with the per capita ratio y/x increasing as the population x increases for the first group: Boston, Atlanta, Washington D. C, and San Francisco. The per capita ratio y/x is also seen to decrease with increasing population for the second group: Atlanta, Dallas, Los Angeles, Houston, and Chicago.

Table 1: Top 10 US Cities with UNHW Individuals

City Population, x (millions) UNHW individuals, y Per capita UNHWs, y/x (per million)

Top 10 Cities sorted by increasing population New York 8.245 57,860 7018 Los Angeles 3.82 4,350 1139 Chicago 2.707 2,000 739 Houston 2.145 2,000 932 Dallas 1.223 1,855 1517 San Francisco 0.813 4,230 5203 Boston 0.625 890 1424 Seattle 0.621 885 1425 Washington 0.618 2,000 3236 Atlanta 0.432 960 2222 Increasing per capita with increasing population Boston 0.625 890 1424 Atlanta 0.432 960 2222 Washington 0.618 2000 3236 San Francisco 0.813 4230 5203 Decreasing per capita with increasing population Atlanta 0.432 960 2222 Dallas 1.223 1855 1517 Los Angeles 3.82 4350 1139 Houston 2.145 2000 932 Chicago 2.707 2000 739 Source: Cities where Americas wealthiest live, by Brendan Coffey, http://www.forbes.com/sites/brendancoffey/2011/10/19/the-cities-whereamericas-wealthiest-people-live/ Quite remarkably, these two seemingly contrary trends can be described nicely by the rising and the falling hyperbolas, with the general equation y/x =
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A + (B/x). The numerical of B determines whether the hyperbola is a rising or a falling one. If B is positive (B > 0), the graph is a falling hyperbola and if B is negative (B < 0), the graph is a rising hyperbola. The constant A equals the constant value (the asymptotic value) that the per capita ratio approaches as the population increases. This is illustrated in Figure 1. Since the per capita ratio y/x = A + (B/x), it follows that y = Ax + B. The numerical values of A and B can thus be fixed, more readily, by preparing a x-y graph and determining the slope A and the intercept B of the straight line. This is illustrated in Figure 2 which reveals two straight lines with a positive slope but with a positive and negative intercept on the y-axis (vertical axis, or the number of UHNWs).

Per Capita ratio, y/x [per million] [millions]

9000 8000 7000 6000 5000 4000 3000 2000 1000 0 0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00 10.00

Population, x [millions]
Figure 1: Contrary trends of both rising and falling per capita ratios for the cities where the wealthiest live, as a function of increasing population. The top 10 cities fall in two groups, with Atlanta, the city with the lowest population,

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serving as a reference point. Relative to Atlanta, one group has rising per capita ratios while the other group has falling values. The constants A and B are determined from the (x, y) pair for the two cities indicated. New York City, with the highest population, also has the highest per capita ratio and falls just beneath the rising hyperbola. A slight adjustment in the value of just the numerical value of B will yield another member of this family of either the rising or the falling hyperbola. Thus, the data for New York city (not shown in Figure 2, shown in Figure 1) ) falls below the rising hyperbola and may be thought of as falling on another hyperbola with a slightly different value of B.

6,000

5,000

Number of UHNWs, y

y = Ax + B = 8582.7x -2747.7 A > 0, B < 0 Atlanta-San Francisco

4,000

3,000

2,000

y = Ax + B = 960.7x + 680 A > 0, B > 0 LA-Dallas

1,000

0 0.000

1.000

2.000

3.000

4.000

5.000

Population, x [millions]
Figure 2: The x-y diagram (population versus number of UHNW individuals) for the cities where the wealthiest live. The data falls on two straight lines, one with

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a positive intercept (B > 0) on the vertical y-axis (this gives the falling hyperbola) and a negative intercept (B < 0, which gives the rising hyperbola).

Likewise, a slight adjustment in the value of B associated with the falling hyperbola will yield a curve that passes through the Houston and Chicago data. The physical significance of these numerical constants has been discussed in Refs. [1, 2, 4] and need not be repeated here.

Reference List
1. Europe and Asia-Pacific billionaires in the Forbes 2013 list: Whats the difference? Published March 10, 2013 http://www.scribd.com/doc/129634796/Europe-and-Asia-Pacific-Billionairesin-the-2013-Forbes-List-What-s-the-difference 2. Countries with the most billionaires in the 2013 Forbes Billionaire List, Published March 9, 2013, http://www.scribd.com/doc/129406030/Countrieswith-Most-Billionaires-in-the-Forbes-2013-Billionaires-List 3. The Rate of Creation of Billionaires: Analysis of the Forbes 2013 Billionaire List, Published March 6, 2013, http://www.scribd.com/doc/128944910/The-Rate-of-Creation-ofBillionaires-Analysis-of-the-2013-Forbes-Billionaire-s-List 4. Billionaires and Calculus: Ratio versus Rate of Change Is Einsteins Work Function Observed In this Problem? Published March 5, 2013. http://www.scribd.com/doc/128610494/The-Forbes-Billionaires-andCalculus-Is-Einstein-s-Work-Function-Observed-Here 5. Billionaires and the Population Law: Analysis of the 2013 Forbes Billionaires List, to be published shortly. 6. Cities where Americas wealthiest live, by Brendan Coffey, Oct 19, 2011, Forbes, http://www.forbes.com/sites/brendancoffey/2011/10/19/thecities-where-americas-wealthiest-people-live/ 7. Which Country Has the Most Billionaires Per Capita? by Emma Roller, March 4, 2013, Slate magazine, click here, or see
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http://www.slate.com/blogs/moneybox/2013/03/04/forbes_billionaires_ list_countries_with_the_most_billionaires_per_capita.html 8. Top 50 Cities in US by Population and Rank (for the years 1990, 2000, 2005, 2010, and 2011 http://www.infoplease.com/ipa/A0763098.html 9. List of North American cities by population, 10. Largest cities in the US http://en.wikipedia.org/wiki/Largest_cities_in_the_United_Stat
http://en.wikipedia.org/wiki/List_of_North_American_cities_by_population

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About the author V. Laxmanan, Sc. D.

The author obtained his Bachelors degree (B. E.) in Mechanical Engineering from the University of Poona and his Masters degree (M. E.), also in Mechanical Engineering, from the Indian Institute of Science, Bangalore, followed by a Masters (S. M.) and Doctoral (Sc. D.) degrees in Materials Engineering from the Massachusetts Institute of Technology, Cambridge, MA, USA. He then spent his entire professional career at leading US research institutions (MIT, Allied Chemical Corporate R & D, now part of Honeywell, NASA, Case Western Reserve University (CWRU), and General Motors Research and Development Center in Warren, MI). He holds four patents in materials processing, has co-authored two books and published several scientific papers in leading peer-reviewed international journals. His expertise includes developing simple mathematical models to explain the behavior of complex systems. While at NASA and CWRU, he was responsible for developing material processing experiments to be performed aboard the space shuttle and developed a simple mathematical model to explain the growth Christmas-tree, or snowflake, like structures (called dendrites) widely observed in many types of liquid-to-solid phase transformations (e.g., freezing of all commercial metals and alloys, freezing of water, and, yes, production of snowflakes!). This led to a simple model to explain the growth of dendritic structures in both the groundbased experiments and in the space shuttle experiments. More recently, he has been interested in the analysis of the large volumes of data from financial and economic systems and has developed what may be called the Quantum Business Model (QBM). This extends (to financial and economic systems) the mathematical arguments used by Max Planck to develop quantum physics using the analogy Energy = Money, i.e., energy in physics is like money in economics. Einstein applied Plancks ideas to describe the photoelectric effect (by treating light as being composed of particles called photons, each with the fixed quantum of energy conceived by Planck). The mathematical law deduced
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by Planck, referred to here as the generalized power-exponential law, might actually have many applications far beyond blackbody radiation studies where it was first conceived. Einsteins photoelectric law is a simple linear law and was deduced from Plancks non-linear law for describing blackbody radiation. It appears that financial and economic systems can be modeled using a similar approach. Finance, business, economics and management sciences now essentially seem to operate like astronomy and physics before the advent of Kepler and Newton. Finally, during my professional career, I also twice had the opportunity and great honor to make presentations to two Nobel laureates: first at NASA to Prof. Robert Schrieffer (1972 Physics Nobel Prize), who was the Chairman of the Schrieffer Committee appointed to review NASAs space flight experiments (following the loss of the space shuttle Challenger on January 28, 1986) and second at GM Research Labs to Prof. Robert Solow (1987 Nobel Prize in economics), who was Chairman of Corporate Research Review Committee, appointed by GM corporate management.

Cover page of AirTran 2000 Annual Report

Can you see that plane flying above the tall tree tops that make a nearly perfect circle? It requires a great deal of imagination to see and photograph it.

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