Estimates Of Wealth Research Articles

Who Are the Global Top 1%?

This paper presents the first in-depth analysis of the changing composition of the global income rich and the rising representation of developing countries at the top of the global distribution. We construct global distributions of income during 1988–2012 based on both household surveys and the new top incomes data derived from tax records, which better capture the rich who are typically excluded from household surveys. We find that the representation of developing countries in the global top 1% declined until about 2002, but that since 2005 it has risen significantly. This coincides with a decline in global inequality since 2005, according to a range of measures. We compare our estimates of the country-composition and income levels of the global rich with a number of other sources—including Credit Suisse’s estimates of global wealth, the Forbes World Billionaires List, attendees of the World Economic Forum, and estimates of top executives’ salaries. To varying degrees, all show a rise in the representation of the developing world in the ranks of the global elite.

Wealth Inequality in Sweden: What can we Learn from Capitalized Income Tax Data?

This paper presents new estimates of wealth inequality in Sweden during 2000–2012, linking wealth register data up to 2007 and individually capitalized wealth based on income and property tax registers for the period thereafter when a repeal of the wealth tax stopped the collection of individual wealth statistics. We find that wealth inequality increased after 2007 and that more unequal bank holdings and housing appear to be important drivers. We also evaluate the performance of the capitalization method by contrasting its estimates and their dispersion with observed stocks in register data up to 2007. The goodness‐of‐fit varies tremendously across assets and we conclude that although capitalized wealth estimates may well approximate overall inequality levels and trends, they are highly sensitive to assumptions and the quality of the underlying data sources.

How Fat is the Top Tail of the Wealth Distribution?

Differential unit non‐response in household wealth surveys biases estimates of top tail wealth shares downward. Using Monte Carlo evidence, I show that adding only a few extreme observations to wealth surveys is sufficient to remove the downward bias. Combining extreme wealth observations from Forbes World's billionaires with the Survey of Consumer Finances, the Wealth and Assets Survey, and the Household Finance and Consumption Survey, I provide new improved estimates of top tail wealth in the United States, the United Kingdom, and nine euro area countries. These new estimates indicate significantly higher top wealth shares than those calculated from the wealth surveys alone.

Top Wealth Shares in the UK Over More than a Century

Recent research highlighted controversy about the evolution of concentration of personal wealth. In this paper we provide new evidence about the long-run evolution of top wealth shares for the United Kingdom. The new series covers a long period – from 1895 to the present – and has a different point of departure from the previous literature: the distribution of estates left at death. We find that the application to the estate data of mortality multipliers to yield estimates of wealth among the living does not substantially change the degree of concentration over much of the period both, in the UK and US, allowing inferences to be made for years when this method cannot be applied. The results show that wealth concentration in the UK remained relatively constant during the first wave of globalization, but then decreased dramatically in the period from 1914 to 1979. The UK went from being more unequal in terms of wealth than the US to being less unequal. However, the decline in UK wealth concentration came to an end around 1980, and since then there is evidence of an increase in top shares, notably in the distribution of wealth excluding housing in recent years. We investigate the triangulating evidence provided by data on capital income concentration and on reported super fortunes.

Cohort Changes in Social Security Benefits and Pension Wealth

We utilize three sets of data resources — the Health and Retirement Study (HRS), linked Social Security earnings records of the HRS respondents, and publicly available pension plan descriptions — to study pension wealth accumulations among the recent HRS cohorts. We document the trends in pension wealth over time and across cohorts during a period in which the economic consequences of the Great Recession were significant. However, given that pension wealth of many respondents were imputed in earlier waves due to the lack of information about pension plan provisions, there is the question of how much of the changes in pension wealth should be attributed to errors in imputation. The recently available pension plan descriptions from private employers’ Form 5500 filings and public employers’ websites, which improve the respondent-plan linkage over what was available in previous waves, allow us to examine this exact question. In particular, we show that the newly available sets of information not only reduce the need for imputation, but also enable us to identify the plans not reported by HRS respondents in the survey and the retirement wealth associated with these plans. Finally, we also test the validity of the earnings projection methods used to produce Social Security and pension wealth estimates in the HRS, and we end our report with a discussion over the pros and cons among the projection methods.

Biodiversity and Carbon Stock in the SODECAO Agroforestry System of Center Region of Cameroon: Case of Talba Locality

This study was carried out in typical SODECAO (Cocoa Development Company) agroforestry systems of Talba locality (Central region of Cameroon). The objective was to assess the role of typical SODECAO agroforestry systems in the conservation of biodiversity and the climate change mitigation. Trees inventories of diameter ≥10 cm and all cocoa trees were carried out in 40 plots of 25 m x 25 m. Cocoa Agroforests (CAF) sampled were stratified in three age classes (≥10, 10-20 and 20 years represented by young, middle and old cocoa agroforests respectively). Their aboveground biomass was estimated using allometric equations. A total of 21 trees species belonging to 19 genera and 14 families were inventoried. Of the total number of species of trees recorded, 24% were threatened looking at their IUCN (International Union for Conservation of Nature) status. Indeed, 9 species (43%) were indigenous and 12 (57%) exotic. The biodiversity indices values found were: Shannon (2.7), Pielou (0.7) and Simpson (0.9). The estimation of the specific wealth varied from 73-81% in CAF. The abundance of cocoa shrubs and associated tree species were estimated to 1104 stems ha^-1 and 77 stems ha^-1 respectively. The total carbon stock was 100 Mg Cha^-1. Cocoa shrubs and associated tree species carbon stock were 30 and 70 Mg Cha^-1 respectively. According to the three age classes considered, there were a significantly differences between their carbon stocks (ANOVA, p <0.05). SODECAO cocoa agroforestry systems could be recognized amongst one of the major issues of international negotiations for the fight against climate change.

What Do We Learn About Redistribution Effects of Pension Systems from Internationally Comparable Measures of Social Security Wealth?

We present novel estimates of Social Security Wealth (SSW) at the individual level based on the SHARE survey. Our estimates are based on a rigorous methodology taking into account country-specific legislations, the earnings history and the longevity prospects of individuals. The key advantage over existing estimates is that our measures of SSW is fully comparable across countries. This allows us to construct several indexes of the redistribution enacted by the pension systems in Europe. Moreover, simple correlations between SSW and alternative measures of private wealth are presented to provide descriptive evidence of the displacement effect of SSW on private wealth.

Using inclusive wealth for policy evaluation: Application to electricity infrastructure planning in oil-exporting countries

Decision-makers often seek to design policies that support sustainable development. Prospective evaluations of how effectively such policies are likely to meet sustainability goals have nonetheless remained challenging. Evaluating policies against sustainability goals can be facilitated through the inclusive wealth framework, which characterizes development in terms of the value to society of its underlying capital assets, and defines development to be potentially sustainable if that value does not decline over time. The inclusive wealth approach has been developed at a theoretical level and applied to retrospective evaluations. Here, we apply inclusive wealth theory to prospective policy evaluation coupled with dynamic simulation modeling, using a case of electricity infrastructure policies in oil-exporting countries. To demonstrate the prospective evaluation, we analyze investment policies in non-fossil electricity capacity in terms of their forecast impact on several dimensions of inclusive wealth. Illustrative results show that investing in non-fossil capacity in Saudi Arabia and Kuwait can increase components of the countries' inclusive wealth, though the impacts depend on future uncertainties. In contrast, comparable components of the UAE's net inclusive wealth decline under similar investment policies. Finally, including human capital improvements in estimates of inclusive wealth substantially increases its value, though the amount varies across the countries.

Searching for Symbolic Value of Cattle: Tropical Livestock Units, Market Price, and Cultural Value of Maasai Livestock

We examine metabolic, market, and symbolic values of livestock relative to cultural “positioning” by gender, marriage, and household production among Maasai people in Simanjiro, Tanzania to assess local “proximate currencies” relevant for “cultural success.” Data from mixed methods ethnographic research include qualitative interviews since 2012, observation of 85 livestock market sales in 2013 and 2015, and 37 short key informant interviews in 2015. We examine fit between market values, Tropical Livestock Units (TLU, weight-based species exchange ratio), and perceived value from interviews for moran (unmarried men), muruo (married men), and tɔmɔnɔ́k (married women). Hedonic regression using livestock species, sex, maturity, and size accounted for 90% of the local market price of livestock. We compared the market-based exchange ratio between cattle and smallstock (sheep and goats) to TLU and perceived values situating symbolic value of cattle in terms of Maasai household production schema. One TLU model accurately predicted market exchange ratios, while another predicted hypothetical exchanges, suggesting need for improved livestock wealth estimation for pastoralists. Ritual context, subsistence work, and cultural position influenced perceived values: Moran overvalued cattle by 100% of the local market value. Tɔmɔnɔ́k accurately perceived the market exchange ratio despite never directly engaging in livestock market transactions. Muruo perceived exchange ratios intermediate between moran and tɔmɔnɔ́k. We argue that these perceptions of value reflect distinct labor responsibilities of moran, muruo, and tɔmɔnɔ́k in livestock management, differential value of bridewealth, and control of meat and milk.Attention to value of different livestock species in cultural models of production may prove useful for development efforts.

Constructing spatiotemporal poverty indices from big data

Big data offers the potential to calculate timely estimates of the socioeconomic development of a region. Mobile telephone activity provides an enormous wealth of information that can be utilized alongside household surveys. Estimates of poverty and wealth rely on the calculation of features from call detail records (CDRs), however, mobile network operators are reluctant to provide access to CDRs due to commercial and privacy concerns. As a compromise, this study shows that a sparse CDR dataset combined with other publicly available datasets based on satellite imagery can yield competitive results. In particular, a model is built using two CDR-based features, mobile ownership per capita and call volume per phone, combined with normalized satellite nightlight data and population density, to estimate the multi-dimensional poverty index (MPI) at the sector level in Rwanda. This model accurately estimates the MPI for sectors in Rwanda that contain mobile phone cell towers (cross-validated correlation of 0.88).

Using night light emissions for the prediction of local wealth

Nighttime illumination can serve as a proxy for economic variables in particular in developing countries, where data are often not available or of poor quality. Existing research has demonstrated this for coarse levels of analytical resolution, such as countries, administrative units or large grid cells. In this article, we conduct the first fine-grained analysis of night lights and wealth in developing countries. The use of large-scale, geo-referenced data from the Demographic and Health Surveys allows us to cover 39 less developed, mostly non-democratic countries with a total sample of more than 34,000 observations at the level of villages or neighborhoods. We show that light emissions are highly accurate predictors of economic wealth estimates even with simple statistical models, both when predicting new locations in a known country and when generating predictions for previously unobserved countries.

Comprehensive versus inclusive wealth accounting and the assessment of sustainable development: An empirical comparison

This paper compares alternative wealth estimates reported by the World Bank and in the Inclusive Wealth Reports. Although theoretical limitations and shortcomings are widely acknowledged in the literature, the extent to which the alternative approaches to wealth accounting matter empirically is not well known. Comparing the alternative data in levels, shares, growth rates, and monetary sustainability indices derived from them, major differences emerge between OECD and non-OECD countries. For the former, the alternative wealth estimates seem complementary, but only if a key assumption made in the derivation of inclusive wealth is violated. For the latter, the data seem much less useful. For example, depending on which data source is used, for the group of low income countries the share of natural capital in total wealth is either 36.8% or 60.4%, suggesting that extreme care must be taken if the composition of wealth were to be used to inform policy-making. Neither wealth data set provides a ‘definite guide’ to economic sustainability, but a combination of indices derived from both might be useful in a holistic assessment of sustainability.

Estimating Top Income and Wealth Shares: Sensitivity to Data and Methods

Administrative income tax data indicate that U.S. top income and wealth shares are both substantial and larger than shares observed in household surveys. However, these estimates are sensitive to the unit of analysis, the income concept measured in tax records, and, in the case of wealth, to assumptions about the correlation between income and wealth. We constrain a household survey--the Survey of Consumer Finances--to be conceptually comparable to tax records and are able to reconcile the much of the difference between the survey and administrative estimates. Wealth estimates from administrative income tax data are sensitive to model parameters.

Estimating the Top Tail of the Wealth Distribution

This paper uses the Household Finance and Consumption Survey to construct new estimates of top wealth shares in Germany, France, Spain, Italy, Belgium, Austria, Finland and The Netherlands. It provides a methodology to address simultaneously non-response and underreporting in wealth surveys.

Wealth Inequality in Sweden: What Can We Learn from Capitalized Income Tax Data?

This paper presents new estimates of wealth inequality in Sweden during 2000–2012, linking wealth register data up to 2007 and individually capitalized wealth based on income and property tax registers for the period thereafter when a repeal of the wealth tax stopped the collection of individual wealth statistics. We find that wealth inequality increased after 2007 and that more unequal bank holdings and apartment ownership appear to be important drivers. We also evaluate the performance of the capitalization method by contrasting its estimates and their dispersion with observed stocks in register data up to 2007. The goodness-of-fit varies tremendously across assets and we conclude that although capitalized wealth estimates may well approximate overall inequality levels and trends, they are highly sensitive to assumptions and the quality of the underlying data sources.

A geospatial approach to measuring regional and sub‐regional inclusive wealth: the case of resource rich West Virginia, USA

AbstractInclusive wealth is a key indicator of economic sustainability and an important component in evaluating regional policy and sustainable development initiatives. Measuring capital stocks at scales below the national level is challenging and there is limited empirical research to guide individual or comparative studies. Advances in geospatial technologies including GIS and remote sensing, and the availability of well‐attributed spatial data, provide new opportunities to generate empirical wealth estimates at differing spatial granularities. Based on a case study of West Virginia, USA, this study outlines an approach for determining inclusive wealth estimates using GIS and spatial data infrastructures at sub‐regional scales of analysis.

Системне визначення економічної оцінки природного багатства України

Системне визначення економічної оцінки природного багатства України

Research note: a revised set of New Zealand wealth estimates

In the February 2015 issue of Policy Quarterly I presented a table and chart tracing New Zealand’s national wealth from 1980 to 2014, including private wealth figures drawn from the Reserve Bank of New Zealand’s household-sector balance sheets. Expressed as percentages of GDP, these figures provided estimates of Thomas Piketty’s beta (the ratio of national wealth to national income) over those 35 years. In the February 2015 article I compared my results with the beta values calculated by Piketty for a number of other OECD countries over much longer time spans. New Zealand seemed at that point to have a lower beta than the typical developed economy, though with a parallel rising trend.

Why Wealthier People Think People Are Wealthier, and Why It Matters

The present studies provide evidence that social-sampling processes lead wealthier people to oppose redistribution policies. In samples of American Internet users, wealthier participants reported higher levels of wealth in their social circles (Studies 1a and 1b). This was associated, in turn, with estimates of higher mean wealth in the wider U.S. population, greater perceived fairness of the economic status quo, and opposition to redistribution policies. Furthermore, results from a large-scale, nationally representative New Zealand survey revealed that low levels of neighborhood-level socioeconomic deprivation—an objective index of wealth within participants’ social circles—mediated the relation between income and satisfaction with the economic status quo (Study 2). These findings held controlling for relevant variables, including political orientation and perceived self-interest. Social-structural inequalities appear to combine with social-sampling processes to shape the different political attitudes of wealthier and poorer people.

Estimating the absolute wealth of households.

ObjectiveTo estimate the absolute wealth of households using data from demographic and health surveys.MethodsWe developed a new metric, the absolute wealth estimate, based on the rank of each surveyed household according to its material assets and the assumed shape of the distribution of wealth among surveyed households. Using data from 156 demographic and health surveys in 66 countries, we calculated absolute wealth estimates for households. We validated the method by comparing the proportion of households defined as poor using our estimates with published World Bank poverty headcounts. We also compared the accuracy of absolute versus relative wealth estimates for the prediction of anthropometric measures.FindingsThe median absolute wealth estimates of 1 403 186 households were 2056 international dollars per capita (interquartile range: 723–6103). The proportion of poor households based on absolute wealth estimates were strongly correlated with World Bank estimates of populations living on less than 2.00 United States dollars per capita per day (R2 = 0.84). Absolute wealth estimates were better predictors of anthropometric measures than relative wealth indexes.ConclusionAbsolute wealth estimates provide new opportunities for comparative research to assess the effects of economic resources on health and human capital, as well as the long-term health consequences of economic change and inequality.