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Inequality and Market Concentration: New Evidence from Australia

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Listed:
  • Lachlan Hotchin
  • Andrew Leigh

Abstract

Are excessively concentrated markets inequitable as well as inefficient? We explore this issue by analyzing the degree of market concentration in the industries where Australia’s wealthiest made their fortunes. Compared with the economy at large, we find that top wealth holders have tended to make their fortunes in industries with a higher-than-average degree of market concentration. Top wealth shares have grown substantially, and from 1990 to 2020, there appears to have been an increase in the propensity of top wealth holders to make their fortunes in highly concentrated industries.

Suggested Citation

  • Lachlan Hotchin & Andrew Leigh, 2024. "Inequality and Market Concentration: New Evidence from Australia," CESifo Working Paper Series 10942, CESifo.
    • Handle: RePEc:ces:ceswps:_10942
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    References listed on IDEAS

    as
    1. Alvaredo, Facundo & Atkinson, Anthony B. & Morelli, Salvatore, 2018. "Top wealth shares in the UK over more than a century," Journal of Public Economics, Elsevier, vol. 162(C), pages 26-47.
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    3. Joshua Gans & Andrew Leigh & Martin Schmalz & Adam Triggs, 2019. "Inequality and market concentration, when shareholding is more skewed than consumption," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 35(3), pages 550-563.
    4. Andrew Leigh, 2022. "A More Dynamic Economy," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 55(4), pages 431-440, December.
    5. Tim Hazledine & John Siegfried, 1997. "How did the wealthiest New Zealanders get so rich?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 31(1), pages 35-47.
    6. James B. Davies & Livio Di Matteo, 2021. "Long Run Canadian Wealth Inequality in International Context," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(1), pages 134-164, March.
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    8. Andrew Leigh & Adam Triggs, 2016. "Markets, Monopolies and Moguls: The Relationship between Inequality and Competition," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 49(4), pages 389-412, December.
    9. Tim Hazledine & Max Rashbrooke, 2018. "The New Zealand rich list twenty years on," New Zealand Economic Papers, Taylor & Francis Journals, vol. 52(3), pages 289-303, September.
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    More about this item

    Keywords

    income distribution; competition; market power;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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