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Book part
Publication date: 14 July 2006

Simon Kelly

The distribution of income and wealth are generally regarded as key performance indicators of a society. Cross-sectional analyses of Australian income and wealth

Abstract

The distribution of income and wealth are generally regarded as key performance indicators of a society. Cross-sectional analyses of Australian income and wealth distributions at various points in time have found that both are highly unequal. However, lifetime distributions may be quite different. This paper provides some insight into the differences for one of these distributionswealth.

A dynamic microsimulation model of the Australian population is used to project the cross-sectional and lifetime asset holdings of a 5-year birth cohort over a period of 40 years. The annual personal net worth of this birth cohort are analysed in regard to age and net worth, the changing wealth distribution within the cohort, wealth mobility, and a comparison of lifetime and cross-sectional distributions.

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Dynamics of Inequality and Poverty
Type: Book
ISBN: 978-0-76231-350-1

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Book part
Publication date: 26 August 2015

Markus Jäntti, Eva M. Sierminska and Philippe Van Kerm

This paper considers a parametric model for the joint distribution of income and wealth. The model is used to analyze income and wealth inequality in five OECD countries…

Abstract

This paper considers a parametric model for the joint distribution of income and wealth. The model is used to analyze income and wealth inequality in five OECD countries using comparable household-level survey data. We focus on the dependence parameter between the two variables and study whether accounting for wealth and income jointly reveals a different pattern of social inequality than the traditional “income only” approach. We find that cross-country variations in the dependence parameter effectively account only for a small fraction of cross-country differences in a bivariate measure of inequality. The index appears primarily driven by differences in inequality in the wealth distribution.

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Measurement of Poverty, Deprivation, and Economic Mobility
Type: Book
ISBN: 978-1-78560-386-0

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Article
Publication date: 1 February 1996

Eoin Reeves and Eoin O’Sullivan

The distribution of personal wealth in the Republic of Ireland has not been estimated since the 1970s. While the publication of those estimates did lead to governmental…

Abstract

The distribution of personal wealth in the Republic of Ireland has not been estimated since the 1970s. While the publication of those estimates did lead to governmental attempts to redistribute wealth, the attempts were stifled by the opposition of powerful interest groups. Highlights the dearth of information on the distribution of wealth in Ireland since then and draws attention to the underlying social, political and economic reasons. Postulates that the reasons for this paucity of information are: the perceived irrelevance of the wealth distribution as an indicator of welfare; the problems normally associated with the available estimation techniques; consequent search costs; and inevitably strong opposition to the governmental attempts to redistribute should evidence of high inequality be produced. In the tradition of Tawney and Titmuss, argues that it is in the interest of a healthy society that the facts regarding such an issue be known.

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International Journal of Social Economics, vol. 23 no. 2
Type: Research Article
ISSN: 0306-8293

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Book part
Publication date: 16 September 2019

Louis Chauvel, Anne Hartung, Eyal Bar-Haim and Philippe Van Kerm

The study of the upper tail of the income and wealth distributions is important to the understanding of economic inequality. By means of the ‘isograph’, a new tool to…

Abstract

The study of the upper tail of the income and wealth distributions is important to the understanding of economic inequality. By means of the ‘isograph’, a new tool to describe income or wealth distributions, the authors compare wealth and income and wealth-to-income ratios in 16 European countries and the United States using data for years 2013/2014 from the Eurozone Household Finance and Consumption Survey and the US Survey on Consumer Finance. Focussing on the top half of the distribution, the authors find that for households in the top income quintile, wealth-to-income ratios generally increase rapidly with income; the association between high wealth and high incomes is highest among the highest percentiles. There is generally a positive relationship between median wealth in the country and the wealth of the top 1%. However, the United States is an outlier where the median wealth is relatively low but the wealth of the top 1% is extremely high.

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What Drives Inequality?
Type: Book
ISBN: 978-1-78973-377-8

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Book part
Publication date: 5 January 2006

John A. James, Michael G. Palumbo and Mark Thomas

Based on empirical patterns of annual earnings and saving from new micro-data covering a large sample of American workers around a hundred years ago, we develop a model…

Abstract

Based on empirical patterns of annual earnings and saving from new micro-data covering a large sample of American workers around a hundred years ago, we develop a model for simulating the cross-section distribution of wealth at the turn of the twentieth century. Our methodology allows for a direct comparison with the wealth distribution from a sample of families in a comparable part of the contemporary income distribution. Our primary finding is that patterns of wealth accumulation among American workers at the turn of the century bear a striking resemblance to contemporary profiles.

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Research in Economic History
Type: Book
ISBN: 978-1-84950-379-2

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Book part
Publication date: 30 September 2014

Karina Doorley and Eva Sierminska

Using harmonized wealth data and a novel decomposition approach in this literature, we show that cohort effects exist in the income profiles of asset and debt portfolios…

Abstract

Using harmonized wealth data and a novel decomposition approach in this literature, we show that cohort effects exist in the income profiles of asset and debt portfolios for a sample of European countries, the United States, and Canada. We find that the association between household wealth portfolios at the intensive margin (the level of assets) and household characteristics is different from that found at the extensive margin (the decision to own). Characteristics explain most of the cross-country differences in asset and debt levels, except for housing wealth, which displays large unexplained differences for both the under-50 and over-50 populations. However, there are cohort differences in the drivers of wealth levels. We observe that younger households’ levels of wealth, given participation, may be more responsive to the institutional setting than mature households. Our findings have important implications, indicating a scope for policies which can promote or redirect investment in housing for both cohorts and which promote optimal portfolio allocation for mature households.

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Economic Well-Being and Inequality: Papers from the Fifth ECINEQ Meeting
Type: Book
ISBN: 978-1-78350-556-2

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Article
Publication date: 27 February 2007

Ronald D. Picur

This study aims to examine whether accounting knowledge is associated with a decision maker's tendency to ignore value added information in wealth measurement and…

Abstract

Purpose

This study aims to examine whether accounting knowledge is associated with a decision maker's tendency to ignore value added information in wealth measurement and distribution decisions.

Design/methodology/approach

A between‐subjects laboratory experiment was employed. Subjects prepared accounting reports that measured and distributed an entity's wealth based upon given accounting data. Accounting knowledge was measured as: a discrete variable by classifying subjects into high‐, low‐ and no‐accounting knowledge groups, and a continuous variable by classifying subjects on the number of accounting courses completed.

Findings

Findings provide empirical evidence that high levels of accounting knowledge interferes with a decision maker's ability to incorporate value added information (versus accounting profit) in wealth measurement and distribution decisions.

Research limitations/implications

This experiment used subjects from the USA where the production and disclosure of a value added report is not mandated. The results should be tested in a country where the statement of value added is routinely produced, disclosed and audited.

Practical implications

This study shows the dysfunctional effect of accounting knowledge which appears to hinder performance in wealth measurement and distribution decisions.

Originality/value

This is the first attempt to explain why decision makers may ignore value added information in wealth measurement tasks and distribution decisions by focusing on the role of knowledge structures.

Details

Review of Accounting and Finance, vol. 6 no. 1
Type: Research Article
ISSN: 1475-7702

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Article
Publication date: 8 July 2020

Juan Ignacio Martín-Legendre, Pablo Castellanos-García and José Manuel Sánchez-Santos

The purpose of this paper is to analyze the changes in wealth and consumption inequality in Spain and estimate the consumption effects of housing and financial wealth.

Abstract

Purpose

The purpose of this paper is to analyze the changes in wealth and consumption inequality in Spain and estimate the consumption effects of housing and financial wealth.

Design/methodology/approach

The estimations are made using micro-data from the Spanish Survey of Household Finances (2002–2014) applying cross-section, panel and interquartile techniques.

Findings

The findings of this paper suggest that there was an increase in wealth inequality during the period under analysis and a reduction in consumption inequality. Also, the authors find a significant positive effect of wealth on consumer expenditure. Disaggregating by asset type, the value of the main residence is the category with the highest estimated effect on consumption, whereas the remaining types of assets, although still positive and generally significant, have more modest effects on consumption. However, the estimated coefficients and their significance can change substantially depending on the phase of the economic cycle and the position of the household in the income distribution.

Originality/value

These results provide new empirical evidence on the effects of household wealth changes on their consumption behavior, the differences depending on the household's position in the distribution and the fluctuations of these estimated coefficients throughout a period of profound economic upheavals.

Details

Applied Economic Analysis, vol. 28 no. 83
Type: Research Article
ISSN: 2632-7627

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Book part
Publication date: 9 April 2008

Lennart Flood and Anders Klevmarken

It is not easy to get a long perspective on the distribution of wealth in Sweden because there is no single data source that gives a consistent view for a long period of…

Abstract

It is not easy to get a long perspective on the distribution of wealth in Sweden because there is no single data source that gives a consistent view for a long period of time. The early estimates of the distribution of wealth were based on the concept of tax-assessed wealth which is the basis of the wealth tax. This definition has the disadvantage of not including assets that were not taxed, and no or very unreliable data were given for the majority of the tax payers who were below the taxation threshold. Furthermore, this variable was defined for individuals and for jointly taxed individuals, but no economically meaningful household concept was available. Register data have since then improved, in particular after the late 1990s when data became available directly from banks, brokers, and insurance companies without the filtering of the tax payers. The problem with the household definition remains, but in SESIM we have made corrections to get a useful definition (see Chapter 3). A relatively large survey (HEK) run by Statistics Sweden which combines survey information about the household with register data on assets estimates the median household wealth to 156000 SEK in 1999 and 197000 SEK in 2003.2 The latter estimate is in the 1999 price level.3 These estimates apply to all households independent of age. As will be shown below, the level of wealth depends very much on age.

Details

Simulating an Ageing Population: A Microsimulation Approach Applied to Sweden
Type: Book
ISBN: 978-0-444-53253-4

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Article
Publication date: 22 December 2020

Yinxing Hong

The socialist political economy with Chinese characteristics reflects the characteristics of ushering into a new era, and the research object thereof shifts to productive…

Abstract

Purpose

The socialist political economy with Chinese characteristics reflects the characteristics of ushering into a new era, and the research object thereof shifts to productive forces. Emancipating and developing productive forces and achieving common prosperity become the main theme. Wealth supersedes value as the fundamental category of economic analysis.

Design/methodology/approach

The theoretical system of socialist political economy with Chinese characteristics cannot proceed from transcendental theories but is problem-oriented. Leading problems involve development stages and research-level problems.

Findings

The economic operation analysis is subject to the goal of optimal allocation of resources with micro-level analysis focused on efficiency and macro-level analysis focused on economic growth and macroeconomic stability also known as economic security. The economic development analysis explores the laws of development and related development concepts in compliance with laws of productive forces. The new development concepts i.e. the innovative coordinated green open and shared development drive the innovation of development theory in political economy.

Originality/value

Accordingly, the political economy cannot study the system only, but also needs to study the problems of economic operation and economic development. Therefore, the theoretical system of the political economy tends to encompass three major parts, namely economic system, economic operation and economic development (including foreign economy). The basic economic system analysis needs to understand the relationship between public ownership and non-public ownership, between distribution according to work and factor payments, and between socialism and market economy from the perspective of coexistence theory, thus transforming institutional advantage into governance advantage.

Details

China Political Economy, vol. 3 no. 2
Type: Research Article
ISSN: 2516-1652

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