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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…

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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: 25 May 2022

Asim K. Karmakar and Sebak K. Jana

The catch word “Globalization” has been defended by advocates for lifting people out of poverty and the inequality in the world. But it has been criticized by opponents…

Abstract

The catch word “Globalization” has been defended by advocates for lifting people out of poverty and the inequality in the world. But it has been criticized by opponents for failing to solve the problem of poverty, inequality, and for increasingly creating wealth disparity. This raises the question. The fact is that the contemporary world exhibits very high levels of inequality of income and wealth both between countries and within countries. Wealth inequality is more pronounced than that of income inequality across the globe and within-countries. Evidence suggests that rising inequality and wealth disparity arising out of globalization drive is choking off the potential benefits to the poor. In this backdrop, a composite assessment has been made in the present chapter to answer the question “whether globalization with its particular ideology, the market fundamentalism has benefited many and whether the performance on the distributional front has really been impressive.” From facts and evidence, the study finds that inequalities in income and wealth, also in wages have widened in many developed, developing developed, and developing countries. Technological change and globalization are their main sources.

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Globalization, Income Distribution and Sustainable Development
Type: Book
ISBN: 978-1-80117-870-9

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Book part
Publication date: 3 June 2008

Frank Heinemann

Measuring risk aversion is sensitive to assumptions about the wealth in subjects’ utility functions. Data from the same subjects in low- and high-stake lottery decisions…

Abstract

Measuring risk aversion is sensitive to assumptions about the wealth in subjects’ utility functions. Data from the same subjects in low- and high-stake lottery decisions allow estimating the wealth in a pre-specified one-parameter utility function simultaneously with risk aversion. This paper first shows how wealth estimates can be identified assuming constant relative risk aversion (CRRA). Using the data from a recent experiment by Holt and Laury (2002a), it is shown that most subjects’ behavior is consistent with CRRA at some wealth level. However, for realistic wealth levels most subjects’ behavior implies a decreasing relative risk aversion. An alternative explanation is that subjects do not fully integrate their wealth with income from the experiment. Within-subject data do not allow discriminating between the two hypotheses. Using between-subject data, maximum-likelihood estimates of a hybrid utility function indicate that aggregate behavior can be described by expected utility from income rather than expected utility from final wealth and partial relative risk aversion is increasing in the scale of payoffs.

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Risk Aversion in Experiments
Type: Book
ISBN: 978-1-84950-547-5

Book part
Publication date: 19 November 2012

Manuel J. Rocha Armada and Ricardo M. Sousa

Purpose – The purpose of this chapter is to assess the role of the wealth-to-income ratio in forecasting housing risk premium.Methodology/approach – To investigate this…

Abstract

Purpose – The purpose of this chapter is to assess the role of the wealth-to-income ratio in forecasting housing risk premium.

Methodology/approach – To investigate this issue, the chapter uses the residuals of the trend relationship among asset wealth and labor income to predict future real housing returns. It shows that deviations of asset wealth from its cointegrating relationship with labor income, wy, track time-variation in expected housing returns.

Findings – Using data for a set of industrialized countries, this chapter finds that if agents are hit by a shock that generates a fall in the wealth-to-income ratio, they will demand (i) a higher housing risk premium when housing assets are complements of financial assets and (ii) a lower housing risk premium when housing assets are substitutes of financial assets.

Originality/value of chapter – The findings of this chapter are novel in the field of alternative finance and, in particular, durable (housing) finance. Indeed, they build on a representative agent's theoretical model to infer about the degree of substitution or complementarity between financial and housing assets, which, in turn, can be useful at developing investment strategies for hedging against the risk of unfavorable housing fluctuations. Additionally, they open a new research avenue for understanding the determinants of housing risk premium by linking the dynamics of asset wealth and labor income with the behavior of future housing returns.

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Recent Developments in Alternative Finance: Empirical Assessments and Economic Implications
Type: Book
ISBN: 978-1-78190-399-5

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Book part
Publication date: 23 April 2012

Lisa A. Keister

Purpose – This chapter explores the relationship between religious affiliation and wealth ownership focusing on generational differences.Methodology – I use data from the…

Abstract

Purpose – This chapter explores the relationship between religious affiliation and wealth ownership focusing on generational differences.

Methodology – I use data from the National Longitudinal Survey of Youth and the Health and Retirement Study to create descriptive statistics and regression analyses of the association between religious affiliation in childhood and adulthood for people of two cohorts.

Findings – This chapter shows that there are important patterns by religious affiliation in total net worth, real assets, and asset allocation across generations. My findings are consistent with past work on religion and wealth ownership showing that Jews, mainline Protestants, and white Catholics tend to have higher total wealth than other groups. In addition, I find that black Protestants, Hispanic Catholics, and conservative Protestants tend to have relatively low wealth, consistent with research on religion, race/ethnicity, and wealth. My findings also show that these patterns are relatively robust across generations.

Research implications – The findings are relevant to research on inequality, wealth accumulation and saving, life course processes, and the effect of religion on stratification outcomes.

Originality/Value – This research shows how religious affiliation and wealth are related across generations.

Details

Religion, Work and Inequality
Type: Book
ISBN: 978-1-78052-347-7

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Abstract

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The Economic Decoding of Religious Dogmas
Type: Book
ISBN: 978-1-78714-536-8

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

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.

Details

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

Keywords

Book part
Publication date: 27 September 2011

Christopher Balding and Yao Yao

Purpose – Study the investment and risk management approach of sovereign wealth funds when national wealth including natural resources is accounted for rather than only…

Abstract

Purpose – Study the investment and risk management approach of sovereign wealth funds when national wealth including natural resources is accounted for rather than only financial asset.

Methodology/Approach – Using a range of widely used asset classes, we simulate sovereign wealth fund returns when considering only financial assets but also under varying levels of national wealth holdings in oil. We optimize two-asset financial portfolios and three-asset portfolios when including oil to maximize the risk-adjusted returns.

Findings – Sovereign wealth funds by failing to invest for the national wealth portfolio are overlooking a major source of volatility. To reduce the level of volatility associated with yearly national wealth returns, allocating a higher percentage of fixed assets to high-quality fixed income and low-risk equities will maximize the risk-adjusted returns of national wealth for sovereign wealth fund states.

Social implications – By focusing solely on the financial assets managed by sovereign wealth funds, states are exposing themselves to significant national wealth risk.

Originality/Value of the paper – This is the first work to estimate the impact on national wealth of oil-dependent states by failing to account for volatile commodity prices through the investment strategies of sovereign wealth funds.

Details

Institutional Investors in Global Capital Markets
Type: Book
ISBN: 978-1-78052-243-2

Keywords

Book part
Publication date: 30 September 2014

Edward N. Wolff

I find that median wealth plummeted over the years 2007–2010, and by 2010 was at its lowest level since 1969. The inequality of net worth, after almost two decades of…

Abstract

I find that median wealth plummeted over the years 2007–2010, and by 2010 was at its lowest level since 1969. The inequality of net worth, after almost two decades of little movement, was up sharply from 2007 to 2010. Relative indebtedness continued to expand from 2007 to 2010, particularly for the middle class, though the proximate causes were declining net worth and income rather than an increase in absolute indebtedness. In fact, the average debt of the middle class actually fell in real terms by 25 percent. The sharp fall in median wealth and the rise in inequality in the late 2000s are traceable to the high leverage of middle-class families in 2007 and the high share of homes in their portfolio. The racial and ethnic disparity in wealth holdings, after remaining more or less stable from 1983 to 2007, widened considerably between 2007 and 2010. Hispanics, in particular, got hammered by the Great Recession in terms of net worth and net equity in their homes. Households under age 45 also got pummeled by the Great Recession, as their relative and absolute wealth declined sharply from 2007 to 2010.

Details

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

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