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Wealth inequality in Central and Eastern Europe: evidence from joined household survey and rich lists’ data

Author

Listed:
  • Michal Brzezinski

    () (Faculty of Economic Sciences, University of Warsaw)

  • Katarzyna Sałach

    (Faculty of Economic Sciences, University of Warsaw)

  • Marcin Wroński

    (Warsaw School of Economics)

Abstract

We study how the problem of the ‘missing rich’, the underrepresentation of the wealthiest in household surveys, affects wealth inequality estimates for the post-socialist countries of Central and Eastern Europe (CEE). The survey data from the second wave of the Household Finance and Consumption Survey (HFCS) are joined with the data from the national rich lists for Estonia, Hungary, Latvia, Poland and Slovakia. Pareto distribution is fitted to the joined survey and rich lists’ data to impute the missing observations for the largest wealth values. We provide the first estimates of the top-corrected wealth inequality for the CEE region in 2013/2014. Despite a short period of wealth accumulation during the post-1989 market economy period, our adjustment procedure reveals that wealth inequality in the Baltic countries is comparable to that of Germany (one of the most wealth unequal countries in Europe), while in Poland and Hungary it has reached levels observed in France or Spain. We discuss possible explanations of these findings with reference to the speed and range of privatization processes, extent of income inequality, and the role of inheritances and wealth taxes in the region.

Suggested Citation

  • Michal Brzezinski & Katarzyna Sałach & Marcin Wroński, 2019. "Wealth inequality in Central and Eastern Europe: evidence from joined household survey and rich lists’ data," Working Papers 2019-09, Faculty of Economic Sciences, University of Warsaw.
  • Handle: RePEc:war:wpaper:2019-09
    as

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    File URL: https://www.wne.uw.edu.pl/index.php/download_file/4917/
    File Function: First version, 2019
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    wealth inequality; missing rich; Pareto distribution; rich lists; Forbes; Household Finance and Consumption Survey; transition countries; Central and Eastern Europe;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • P36 - Economic Systems - - Socialist Institutions and Their Transitions - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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