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The World Distribution of Household Wealth

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  • Davies, James B.
  • Sandstrom, Susanna
  • Shorrocks, Anthony
  • Wolff, Edward N.

Abstract

There has been much recent research on the world distribution of income, but also growing recognition of the importance of other contributions to well-being, including those of household wealth. Wealth is important in providing security and opportunity, particularly in poorer countries that lack full social safety nets and adequate facilities for borrowing and lending. We find, however, that it is precisely in the latter countries where household wealth is the lowest, both in absolute and relative terms. Globally, wealth is more concentrated than income both on an individual and national basis. Roughly 30 per cent of world wealth is found in each of North America, Europe, and the rich Asian-Pacific countries. These areas account for virtually all of the world?s top 1 per cent of wealth holders. On an official exchange rate basis India accounts for about a quarter of the adults in the bottom three global wealth deciles while China provides about a third of those in the fourth to eighth deciles. If current growth trends continue, India, China and the transition countries will move up in the global distribution, and the lower deciles will be increasingly dominated by countries in Africa, Latin American and poor parts of the Asian-Pacific region. Thus wealth may continue to be lowest in areas where it is needed the most.

Suggested Citation

  • Davies, James B. & Sandstrom, Susanna & Shorrocks, Anthony & Wolff, Edward N., 2008. "The World Distribution of Household Wealth," WIDER Working Paper Series DP2008/03, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:dp2008-03
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    References listed on IDEAS

    as
    1. Branko Milanovic, 2002. "True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone," Economic Journal, Royal Economic Society, vol. 112(476), pages 51-92, January.
    2. James B. Davies & Susanna Sandström & Anthony Shorrocks & Edward N. Wolff, 2007. "Estimating the Level and Distribution of Global Household Wealth," University of Western Ontario, Economic Policy Research Institute Working Papers 20075, University of Western Ontario, Economic Policy Research Institute.
    3. Ohlsson, Henry & Roine, Jesper & Waldenstrom, Daniel, 2006. "Long-Run Changes in the Concentration of Wealth: An Overview of Recent Findings," WIDER Working Paper Series 103, World Institute for Development Economic Research (UNU-WIDER).
    4. François Bourguignon & Christian Morrisson, 2002. "Inequality Among World Citizens: 1820-1992," American Economic Review, American Economic Association, vol. 92(4), pages 727-744, September.
    5. Guriev, Sergei & Rachinsky, Andrei, 2006. "The Evolution of Personal Wealth in the Former Soviet Union and Central and Eastern Europe," WIDER Working Paper Series 120, World Institute for Development Economic Research (UNU-WIDER).
    6. DAVIES, JAMES B & Shorrocks, Anthony & Sandstrom, Susanna & WOLFF, EDWARD N, 2007. "The World Distribution of Household Wealth," Center for Global, International and Regional Studies, Working Paper Series qt3jv048hx, Center for Global, International and Regional Studies, UC Santa Cruz.
    7. Shorrocks, Anthony & Wan, Guanghua, 2008. "Ungrouping Income Distributions: Synthesising Samples for Inequality and Poverty Analysis," WIDER Working Paper Series 016, World Institute for Development Economic Research (UNU-WIDER).
    8. Andrea Brandolini & Luigi Cannari & Giovanni D’Alessio & Ivan Faiella, 2006. "Household Wealth Distribution in Italy in the 1990s," Chapters,in: International Perspectives on Household Wealth, chapter 7 Edward Elgar Publishing.
    9. Yemtsov, Ruslan, 2007. "Housing Privatization and Household Wealth in Transition," WIDER Working Paper Series 002, World Institute for Development Economic Research (UNU-WIDER).
    10. Li, Shi & Zhao, Renwei, 2007. "Changes in the Distribution of Wealth in China 1995-2002," WIDER Working Paper Series 003, World Institute for Development Economic Research (UNU-WIDER).
    11. Torche, Florencia & Spilerman, Seymour, 2006. "Household Wealth in Latin America," WIDER Working Paper Series 114, World Institute for Development Economic Research (UNU-WIDER).
    12. Subramanian, S. & Jayaraj, D., 2006. "The Distribution of Household Wealth in India," WIDER Working Paper Series 116, World Institute for Development Economic Research (UNU-WIDER).
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    Keywords

    wealth; net worth; personal assets; wealth inequality; households; balance sheets; portfolios;

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