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How Fat is the Top Tail of the Wealth Distribution?
Author(s) -
Vermeulen Philip
Publication year - 2018
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12279
Subject(s) - wealth distribution , economics , wealth elasticity of demand , differential (mechanical device) , national wealth , consumption (sociology) , distribution (mathematics) , distribution of wealth , econometrics , wealth effect , survey data collection , unit (ring theory) , demographic economics , monetary economics , inequality , finance , statistics , monetary policy , mathematics , mathematical analysis , social science , sociology , engineering , aerospace engineering , mathematics education
Differential unit non‐response in household wealth surveys biases estimates of top tail wealth shares downward. Using Monte Carlo evidence, I show that adding only a few extreme observations to wealth surveys is sufficient to remove the downward bias. Combining extreme wealth observations from Forbes World's billionaires with the Survey of Consumer Finances, the Wealth and Assets Survey, and the Household Finance and Consumption Survey, I provide new improved estimates of top tail wealth in the United States, the United Kingdom, and nine euro area countries. These new estimates indicate significantly higher top wealth shares than those calculated from the wealth surveys alone.