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Wealth Inequality: A Hybrid Approach Toward Multidimensional Distributional National Accounts In Europe

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  • Sofie R. Waltl

Abstract

This article proposes a practically feasible framework for compiling Multidimensional Distributional National Accounts (MDINAs) serving two functions: a comprehensive measure of (components of) net worth and their distribution, and a link to macroeconomic statistics. I break down 12 components of marketable wealth by wealth and income groups, and three functions of wealth for Austria, Finland, France, Germany, and Spain. MDINA complemented by summary indicators reveal large heterogeneity in the degree of inequality, and shed light on differences in the structure of wealth portfolios across and within countries. I combine data collected in the largely harmonized HFCS survey and adjust for remaining differences in survey modes regarding the treatment of the top tail using (Generalized) Pareto models estimated from rich lists or top wealth shares derived from tax data and leaked information on wealth held in offshore tax havens. Measured inequality increases strongest in countries where surveys refrain from appropriate top‐tail corrections.

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  • Sofie R. Waltl, 2022. "Wealth Inequality: A Hybrid Approach Toward Multidimensional Distributional National Accounts In Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 74-108, March.
    • Handle: RePEc:bla:revinw:v:68:y:2022:i:1:p:74-108
    DOI: 10.1111/roiw.12519
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    Cited by:

    1. Wildauer, Rafael & Heck, Ines & Kapeller, Jakob, 2023. "Was Pareto right? Is the distribution of wealth thick-tailed?," Greenwich Papers in Political Economy 38597, University of Greenwich, Greenwich Political Economy Research Centre.
    2. Engel, Janina & Ohlwerter, Dennis & Scherer, Matthias, 2023. "On the estimation of distributional household wealth: addressing under-reporting via optimization problems with invariant Gini coefficient," Working Paper Series 2865, European Central Bank.
    3. N. Denisa Naidin & Sofie R. Waltl & Michael H. Ziegelmeyer, 2022. "Objectified Housing Sales and Rent Prices in Representative Household Surveys: the Impact on Macroeconomic Statistics," BCL working papers 160, Central Bank of Luxembourg.

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