STATISTICS FOR MANAGEMENT PROJECT

Systemic Analysis of Racism

in American Millionaires

Ayan Das (M23MS501)

Harshul Kumar (M23MS503)
14th July’23
Mayank Yadav (M23MS505)
OVERVIEW

We used the standard deviation and mean across four races of

millionaires and non-millionaires, to calculate Z-scores, then
plotted scores on a standardized Z distribution with quantiles.
Our research question was simple: If there is systemic racism in
America, then why are there 1,621,600 Black millionaires? The
fact Black Americans are normally distributed, similar to all the
other races, in terms of being classified as net worth
millionaires, is clear proof contrary to the proposition that
America is systemically racist.

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Background

Critics of America, including wealthy individuals, often present a bleak picture for Black Americans, but data
challenges this narrative. While 1 in 7 white families are millionaires, it's 1 in 50 for Black families (Jan, 2017).
The odds of winning a $1 million lottery jackpot are 1 in 50, making it improbable for a state lottery to survive,
yet critics don't caution penniless Black Americans against playing (Rodriguez, 2022). The existence of Black
millionaires contradicts the idea of systemic racism. The author analogizes systemic racism to an exterminator
eradicating roaches; if even 8% return, the treatment is considered ineffective. Systemic racism should
eradicate all Black millionaires if it truly existed. The media's flawed reasoning lacks substantial proof and
relies on broad inductions from non-representative examples. The distinction between deductive and inductive
arguments lies in the certainty of conclusions, with inductive arguments relying on audiences to fill in missing
links (Bell & Martin, 2019).

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Census Count of Population
By 2020 census count of the population by US Government and reports of Federal Reserve Bank:

USA Odds of
Mill Odds of being a
USA by USA iona being a non-
Population
Race Millionaires ires millionaire in millionai
Race %
Population by Race by the General re in the
for 2020 Rac Pop. General
e% Pop.

White 204.3 million 60.6% 15,405,200 76% 1 in 22 1 in 2

Hispanic 62.1 million 18.4% 1,418,900 7% 1 in 238 1 in 6
Black 46.9 million 13.9% 1,621,600 8% 1 in 208 1 in 7
Asian 24.0 million 7.1% 1,621,600 8% 1 in 208 1 in 15

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Odds of Becoming a Millionaire Within One’s
Race Population

Milliona
Total US Millionaires Within
Within ire Ranked
Race Pop. / Tot.
Race % Odds within Race
Pop.
within
Race*

White 15,405,200/204.3 million 7.53 1 in 13 First, Place

Asian 1,621,600/24.0 million 6.76 1 in 15 Second, Place
Black 1,621,600/46.9 million 3.46 1 in 29 Third Place
Hispanic 1,418,900/62.1 million 2.28 1 in 44 Fourth place

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 Hypothesis

H0 : No race of millionaires or non-millionaires will fall outside of 95% confidence interval.

H1 : At least one race of millionaires or non-millionaires falls outside of 95% confidence interval.

The claim is that there are far too many Black American millionaires for systemic racism to be a real thing. The odds
of a Black American becoming a millionaire is favorable, with a 1 in 29 chance within the Black population, and 1 in
208 in the general population. We will prove claim with simple Census bureau data (Jones et al, 2021) and
computations of percentages and ratios of net worth millionaires across four races: Black, White, Asian and
Hispanic, both millionaires and non-millionaires.

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Research Methodology
The methodology employed the calculation of z-scores and their plotting on a standardized normal
distribution with quantiles. The study used Census bureau data and computed percentages and
ratios of millionaires among Black, White, Asian, and Hispanic populations.

To test the hypothesis, z-scores were calculated :

These z-scores were then plotted on the Z distribution.

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 Research Methodology
Race Xi (Xi-μ)2
White (W-m) 15405200 2761594463265620

Black (B-m) 1621600 1502901610925620

Millionaires
Asian (A-m) 1621600 1502901610925620

Hispanic (H-m) 1418900 1487226444930620

White (W-nm) -188894800 23027796938265600

Black (B-nm) -45278400 66141215925625

Non-Millionaires
Asian (A-nm) -22378400 218072410925625

Hispanic (H-nm) -60681100 553916229930625

TOTAL -297165400.00 31120550925095000

Mean (μ) -37145675

Variance (σ2) 3890068865636870

Standard Deviation (σ) 62370416.59

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Analysis of Results

Race Z- Value
White (W-m) 0.84
Black (B-m) 0.62
Millionaires
Asian (A-m) 0.62
Hispanic (H-m) 0.62
White (W-nm -2.43
Black (B-nm) -0.13
Non-Millionaires
Asian (A-nm) 0.24
Hispanic (H-nm) -0.38

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 Race Z- Value Probability (P)

White (W-m) 0.84 0.79955

Black (B-m) 0.62 0.73237

Millionaires
Asian (A-m) 0.62 0.73237

Hispanic (H-m) 0.62 0.73237

White (W-nm -2.43 0.00755

Non-Millionaires Black (B-nm) -0.13 0.44828

Asian (A-nm) 0.24 0.59483

Hispanic (H-nm) -0.38 0.35197

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Inferences
➢ For White Millionaires Z value is 0.84 and probability P= 0.799, And they belongs to
acceptance region (z score = 1.96). But for White Non-Millionaires Z value is -2.43 and
probability P= 0.0755, And they do not belongs to critical region (z score = -1.96).

➢ For Black Millionaires Z value is 0.62 and probability P= 0.7323, So they are out of
acceptance region (z score = 1.96).for White Non-Millionaires Z value is -0.13 and
probability P= 0.448, And they belongs to acceptance region (z score = -1.96).

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Findings

Based on Z score and probability for different race of millionaire and non-millionaire, we can say that there is
at least one race which is white Millionaire (Z-score= -2.43)who is outside of 95% confidence interval (Z=
±1.96).

So we have to reject null hypothesis which states that “No race of millionaires or non-millionaires will fall outside of
95% confidence interval”.

This research shows that black american race was not victim of systemic racism when it come to being a
millionaire in america. There are other factors too which decide whether one can be millionaire or not.

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Summary and Conclusion
➢ People in the media have been implying that America is unfair to Blacks. Their claims have
been shown untrue when millionaires by race are measured by z-scores on a standard normal
distribution.

➢ Black millionaires, 1.62 million of them, are a contradiction to the claim of systemic racism.

➢ The odds are extremely favorable of being a millionaire, for Black, Hispanic, White, and Asian
Americans, which means the chances of becoming one, is very good! All races of millionaires
are statistically the same on the Z distribution; z-scores for millionaires cluster between .065
and .85.

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