IDEAS home Printed from https://ideas.repec.org/a/hpe/journl/y2010v194i3p65-90.html
   My bibliography  Save this article

The household wealth distribution in Spain: The role of housing and financial wealth

Author

Listed:
  • Francisco Azpitarte

    (Universidad de Vigo)

Abstract

We analyse the distribution of household wealth in Spain using the first wave of the Spanish Survey of Household Finances, conducted by the Bank of Spain in 2002. We study the distribution of the different wealth components and, using inequality decomposition techniques, we assess the contribution of each element to overall wealth inequality. We find that wealth is more unequally distributed than income, while housing wealth is much more evenly distributed than financial wealth. Moreover, we identify two groups of wealth components: one disequalizing group, which includes financial wealth, whose value and portfolio share increase with household wealth; and a second more equalizing one, including housing wealth, whose value increases with wealth, but their share in the portfolio does not. Finally, we show that differences between age groups do not explain why wealth is much more unequally distributed than income. Instead, business and home ownership are factors that clearly contribute to explain this feature.

Suggested Citation

  • Francisco Azpitarte, 2010. "The household wealth distribution in Spain: The role of housing and financial wealth," Hacienda Pública Española / Review of Public Economics, IEF, vol. 194(3), pages 65-90, October.
    • Handle: RePEc:hpe:journl:y:2010:v:194:i:3:p:65-90
    as

    Download full text from publisher

    File URL: https://www.ief.es/comun/Descarga.cshtml?ruta=~/docs/destacados/publicaciones/revistas/hpe/194_Art3.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Edward N. Wolff & Ajit Zacharias & Asena Caner, 2005. "Household wealth, public consumption and economic well-being in the United States," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 29(6), pages 1073-1090, November.
    2. Facundo Alvaredo & Emmanuel Saez, 2009. "Income and Wealth Concentration in Spain from a Historical and Fiscal Perspective," Journal of the European Economic Association, MIT Press, vol. 7(5), pages 1140-1167, September.
    3. Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-1227, September.
    4. F. Chantreuil & A. Trannoy, 1999. "Inequality decomposition values : the trade-off between marginality and consistency," THEMA Working Papers 99-24, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    5. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January.
    6. Olympia Bover & Carmen Martínez-Carrascal & Pilar Velilla, 2005. "The wealth of Spanish households: a microeconomic comparison with the United States, Italy and the United Kingdom," Economic Bulletin, Banco de España, issue JUL, pages 87-109, July.
    7. Mercedes Sastre & Alain Trannoy, 2002. "Shapley inequality decomposition by factor components: Some methodological issues," Journal of Economics, Springer, vol. 9(1), pages 51-89, December.
    8. Richard Blundell & Ian Preston, 1998. "Consumption Inequality and Income Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(2), pages 603-640.
    9. Wolff, Edward N, 1996. "International Comparisons of Wealth Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(4), pages 433-451, December.
    10. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
    11. Olympia Bover, 2010. "Wealth Inequality And Household Structure: U.S. Vs. Spain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(2), pages 259-290, June.
    12. Edward N. Wolff, 1996. "International Comparisons Of Wealth Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 42(4), pages 433-451, December.
    13. Miguel-Angel Lopez-Garcia, 2004. "Housing, prices and tax policy in Spain," Spanish Economic Review, Springer;Spanish Economic Association, vol. 6(1), pages 29-52, April.
    14. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    15. Shorrocks, A F, 1975. "The Age-Wealth Relationship: A Cross-Section and Cohort Analysis," The Review of Economics and Statistics, MIT Press, vol. 57(2), pages 155-163, May.
    16. Javier Diaz-Gimenez & Vincenzo Quadrini & José-Víctor Ríos-Rull & Santiago Budria Rodriguez, 2002. "Updated facts on the U.S. distributions of earnings, income, and wealth," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 26(Sum), pages 2-35.
    17. Edward N. Wolff, 1998. "Recent Trends in the Size Distribution of Household Wealth," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 131-150, Summer.
    18. Andrea Brandolini & Luigi Cannari & Giovanni D’Alessio & Ivan Faiella, 2006. "Household Wealth Distribution in Italy in the 1990s," Chapters, in: Edward N. Wolff (ed.), International Perspectives on Household Wealth, chapter 7, Edward Elgar Publishing.
    19. Davies, James B. & Shorrocks, Anthony F., 2000. "The distribution of wealth," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 11, pages 605-675, Elsevier.
    20. Eva Sierminska & Andrea Brandolini & Timothy Smeeding, 2006. "The Luxembourg Wealth Study – A cross-country comparable database for household wealth research," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(3), pages 375-383, December.
    21. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    22. Shorrocks, A F, 1978. "The Measurement of Mobility," Econometrica, Econometric Society, vol. 46(5), pages 1013-1024, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Clara Martínez Toledano, 2017. "House Price Cycles, Wealth Inequality and Portfolio Reshuffling," World Inequality Lab Working Papers halshs-02797549, HAL.
    2. Vassiliki Koutsogeorgopoulou & Manos Matsaganis & Chrysa Leventi & Jan-David Schneider, 2014. "Fairly Sharing the Social Impact of the Crisis in Greece," OECD Economics Department Working Papers 1106, OECD Publishing.
    3. Stefan Humer & Mathias Moser & Matthias Schnetzer, 2015. "Socioeconomic structures of the Austrian wealth distribution," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(2), pages 269-289, May.
    4. Stefan Bach & Andreas Thiemann & Aline Zucco, 2015. "The Top Tail of the Wealth Distribution in Germany, France, Spain, and Greece," Discussion Papers of DIW Berlin 1502, DIW Berlin, German Institute for Economic Research.
    5. Bach, Stefan & Thiemann, Andreas & Zucco, Aline, 2019. "Looking for the missing rich: tracing the top tail of the wealth distribution," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 26(6), pages 1234-1258.
    6. Ihle, Dorothee & Siebert-Meyerhoff, Andrea, 2017. "The older, the richer? A decomposition of wealth inequality by age subgroups," CAWM Discussion Papers 97, University of Münster, Münster Center for Economic Policy (MEP).
    7. Catalina Amuedo-Dorantes & Cristina Borra, 2018. "Emerging wealth disparities after the storm: Evidence from Spain," Review of Economics of the Household, Springer, vol. 16(4), pages 1119-1149, December.
    8. Orsetta Causa & Nicolas Woloszko & David Leite, 2020. "Housing, Wealth Accumulation and Wealth Distribution: Evidence and Stylized Facts," LWS Working papers 30, LIS Cross-National Data Center in Luxembourg.
    9. Clara Martínez Toledano, 2017. "House Price Cycles, Wealth Inequality and Portfolio Reshuffling," Working Papers halshs-02797549, HAL.
    10. Clara Martínez Toledano, 2017. "House Price Cycles, Wealth Inequality and Portfolio Reshuffling," PSE Working Papers halshs-02797549, HAL.
    11. Kacper Grejcz & Zbigniew Żółkiewski, 2017. "Household wealth in Poland: the results of a new survey of household finance," Bank i Kredyt, Narodowy Bank Polski, vol. 48(3), pages 295-326.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francisco Azpitarte, 2008. "The Household Wealth Distribution in Spain: The Role of Housing and Financial Wealth," Working Papers 83, ECINEQ, Society for the Study of Economic Inequality.
    2. Peter Lindner, 2015. "Factor decomposition of the wealth distribution in the euro area," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(2), pages 291-322, May.
    3. Ingvild Almås & Magne Mogstad, 2009. "Older or Wealthier? The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries," Discussion Papers 583, Statistics Norway, Research Department.
    4. Francisco Azpitarte, 2010. "Measuring poverty using both income and wealth: A cross-country comparison between the U.S. and Spain," Working Papers 153, ECINEQ, Society for the Study of Economic Inequality.
    5. Arthur Charpentier & Stéphane Mussard, 2011. "Income inequality games," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 529-554, December.
    6. Leo Kaas & Georgi Kocharkov & Edgar Preugschat, 2019. "Wealth Inequality and Homeownership in Europe," Annals of Economics and Statistics, GENES, issue 136, pages 27-54.
    7. Anthony Barnes Atkinson, 2006. "Concentration among the Rich," WIDER Working Paper Series RP2006-151, World Institute for Development Economic Research (UNU-WIDER).
    8. Stéphane Mussard & Michel Terraza, 2009. "Décompositions des mesures d'inégalité : le cas des coefficients de Gini et d'entropie," Recherches économiques de Louvain, De Boeck Université, vol. 75(2), pages 151-181.
    9. Cagetti, Marco & De Nardi, Mariacristina, 2008. "Wealth Inequality: Data And Models," Macroeconomic Dynamics, Cambridge University Press, vol. 12(S2), pages 285-313, September.
    10. Sebastian Leitner, 2015. "Drivers of wealth inequality in euro area countries," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 137, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.
    11. Stéphane Mussard, 2006. "La décomposition des mesures d’inégalité en sources de revenu : l’indice de Gini et les généralisations," Cahiers de recherche 06-05, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    12. Jurkatis, Simon & Strehl, Wolfgang, 2014. "Gini decompositions and Gini elasticities: On measuring the importance of income sources and population subgroups for income inequality," Discussion Papers 2014/22, Free University Berlin, School of Business & Economics.
    13. Simon Jurkatis, "undated". "Dos and Don'ts of Gini Decompositions," BDPEMS Working Papers 2013003, Berlin School of Economics.
    14. Frank A. Cowell & Philippe Kerm, 2015. "Wealth Inequality: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(4), pages 671-710, September.
    15. Ingvild Almås & Magne Mogstad, 2009. "Older or Wealthier? The Impact of Age Adjustments on the Wealth Inequality Ranking of Countries," Discussion Papers 583, Statistics Norway, Research Department.
    16. Cecilia García-Peñalosa & Elsa Orgiazzi, 2013. "Factor Components of Inequality: A Cross-Country Study," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(4), pages 689-727, December.
    17. Timm Bönke & Markus M. Grabka & Carsten Schröder & Edward N. Wolff, 2020. "A Head‐to‐Head Comparison of Augmented Wealth in Germany and the United States," Scandinavian Journal of Economics, Wiley Blackwell, vol. 122(3), pages 1140-1180, July.
    18. Stéphane Mussard, 2006. "Une réconciliation entre la décomposition en sous-groupes et la décomposition en sources de revenu de l'indice de Gini. La multi-décomposition de l'indicateur de Gini," Annals of Economics and Statistics, GENES, issue 81, pages 169-193.
    19. John Chiwuzulum Odozi & Ruth Uwaifo Oyelere, 2023. "Evolution of Inequality in Nigeria: a Tale of Falling Inequality, Rising Poverty, and Regional Heterogeneity," Journal of Economics, Race, and Policy, Springer, vol. 6(4), pages 297-309, December.
    20. Carlo Vittorio FIORIO, 2008. "Understanding Italian inequality trends: a simulation-based decomposition," Departmental Working Papers 2008-26, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

    More about this item

    Keywords

    Wealth; income; distribution; inequality decomposition.;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hpe:journl:y:2010:v:194:i:3:p:65-90. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Miguel Gómez de Antonio (email available below). General contact details of provider: https://edirc.repec.org/data/iefgves.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.