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NumPy Cookbook - Second Edition by Ivan Idris

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Discovering a power law

For the purpose of this recipe, imagine that we are operating a hedge fund. Let it sink in; you are part of the one percent now!

Power laws occur in a lot of places; see http://en.wikipedia.org/wiki/Power_law for more information. In such a law, one variable is equal to the power of another:

Discovering a power law

The Pareto principle (see http://en.wikipedia.org/wiki/Pareto_principle) for instance, is a power law. It states that wealth is unevenly distributed. This principle tells us that if we group people by their wealth, the size of the groups will vary exponentially. To put it simply, there are not a lot of rich people, and there are even less ...

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