They then examined how each individual's earnings had changed exactly one decade after the initial income number was collected.
In return for a lower initial income, a "joint life" annuity – sometimes called a survivor's pension – will be paid to a named person when you die.
This error makes the initial income gaps seem far larger than they really are, so the subsequent catching-up is correspondingly faster.
In recent transactions, including Mr. Macklowe's, the expected initial income from the buildings was less than 4percentt a year, with cash flow projected to rise significantly as leases expired and rents reached market levels.
Connolly says: "If you are planning on buying an annuity to take pension benefits, then the main reason to invest in a pension is to get the initial income tax relief.
A 65-year old with a £100,000 pension pot can get an initial income of £5,900 with a flat-rate annuity; with an inflation-linked annuity, the income falls to £3,400.
They point out that the current system discourages saving, by taxing it twice: once when the initial income is earned, and again when the returns to investment are reaped.
After adjustment for differences in initial income, climate, the proportion of people near coastlines and human capital, countries with a freedom score below five saw growth of less than 0.4% a year, on average, between 1980 and 2000.
A new book from the Open Society Institute, a foundation financed by George Soros, points out that resource-poor countries grew two to three times faster than resource-rich countries between 1960 and 1990 (even after adjusting for differences in population, initial income per head and other variables).
However, it lacks precise information concerning the cost differences that are responsible for the initial income inequality.
