The distribution of wealth is a comparison of the wealth of various members or groups in a society.

It differs from the distribution of income in that it looks at the distribution of ownership of the assets in
a society, rather than the current income of members of that society.
Contents
[hide]
1 Definition of wealth
2 Statistical distributions
3 Redistribution of wealth and public policy
4 Charity
5 Wealth surveys
6 21st century
o 6.1 Real estate
7 In the United States
8 Data, charts, and graphs
o 8.1 World distribution of wealth
8.1.1 Table
9 World distribution of financial wealth
10 See also
11 References
12 External links
Definition of wealth[edit]
Main article: Wealth
Wealth in the context of this article is defined as a person's net worth, expressed as:
wealth = assets liabilities
The word "wealth" is often confused with "income". These two terms describe different but
related things. Wealth consists of those items of economic value that an individual owns, while
income is an inflow of items of economic value. (See Stock and flow.) The relation between
wealth, income, and expenses is:
change of wealth = income expense.
A common mistake made by people embarking on a research project to determine the
distribution of wealth is to use statistical data of income to describe the distribution of wealth.
The distribution of income is substantially different from the distribution of wealth. According
to the International Association for Research in Income and Wealth, "the world distribution of
wealth is much more unequal than that of income."
[1]

If an individual has a large income but also large expenses, her or his wealth could be small
or even negative.
The United Nations definition of inclusive wealth is a monetary measure which includes the
sum of natural, human and physical assets.
[2][3]

Statistical distributions[edit]
There are many ways in which the distribution of wealth can be analyzed. One example is to
compare the wealth of the richest one percent with the wealth of the median (or 50th)
percentile. In many societies, the richest ten percent control more than half of the total
wealth.
Pareto Distribution has often been used to mathematically quantify the distribution of
wealth, since it models a random distribution.
Wealth Over People (WOP) Curves are a visually compelling way to show the distribution
of wealth in a nation. WOP curves are modified Distribution of Wealth curves. The vertical
and horizontal scales each show percentages from zero to one hundred. We imagine all the
households in a nation being sorted from richest to poorest. They are then shrunk down and
lined up (richest at the left) along the horizontal scale. For any particular household, its point
on the curve represents how their wealth compares (as a %) to the average wealth of the
richest percentile. For any nation, the average wealth of the richest 1/100 of households is
the topmost point on the curve (People = 1%, Wealth = 100%) or (p=1, w=100) or (1,100). In
the real world two points on the WOP curve are always known before any statistics are
gathered. These are the topmost point (1,100) by definition, and the rightmost point (poorest
people, lowest wealth) or (p=100,w=0) or (100,0). This unfortunate rightmost point is given
because there are always at least one percent of households (incarcerated, long term
illness, etc.) with no wealth at all. Given that the topmost and rightmost points are fixed ...
our interest lies in the form of the WOP curve between them. There are two extreme
possible forms of the curve. The first is the "Perfect Communist" WOP. It is a straight line
from the leftmost (maximum wealth) point horizontally across the people scale to p=99.
Then it drops vertically to wealth = 0 at (p=100,w=0).
The other extreme is the "Perfect Tyranny" form. It starts on the left at the Tyrant's maximum
wealth of 100%. It then immediately drops to zero at p=2, and continues at zero horizontally
across the rest of the people. That is, the tyrant and his friends (the top percentile) own all
the nation's wealth. All other citizens are serfs or slaves. An obvious intermediate form is a
straight line connecting the left/top point to the right/bottom point. In such a "Diagonal"
society a household in the richest percentile would have just twice the wealth of a family in
the median (50th) percentile. Such a society is compelling to many (especially the poor). In
fact it is a comparison to a diagonal society that is the basis for the "Gini Values" used as a
measure of the "Disequity" in a particular economy. These Gini values (40.8 in 2007) show
the United States to be the third most dis-equitable economy of all the developed nations
(behind Denmark and Switzerland). The US WOP Curve is shown below. As you will see it
approaches the "Tyrant's Curve".
A curve that is visually appealing is the "Quarter Circle Curve" or the "Wagon Wheel WOP".
Some reformers feel that any nation's tax system should be set up so that its WOP never
gets sucked in beyond the Wagon Wheel form.
More sophisticated models have also been proposed.
[4]

Redistribution of wealth and public policy[edit]
See also: Redistribution of wealth


Number of high net worth individuals in the world, 2011.
[5]

In many societies, attempts have been made, through property redistribution, taxation,
or regulation, to redistribute wealth, sometimes in support of the upper class, and sometimes
to diminish extreme inequality.
Examples of this practice go back at least to the Roman republic in the third century
B.C.,
[6]
when laws were passed limiting the amount of wealth or land that could be owned by
any one family. Motivations for such limitations on wealth include the desire for equality of
opportunity, a fear that great wealth leads to political corruption, to the belief that limiting
wealth will gain the political favor of a voting bloc, or fear that extreme concentration of
wealth results in rebellion.
[7]
Various forms of socialism attempt to diminish the unequal
distribution of wealth and thus the conflicts and social problems (see image below) arising
from it.
[8]

During the Age of Reason, Francis Bacon wrote "Above all things good policy is to be used
so that the treasures and monies in a state be not gathered into a few hands... Money is like
fertilizer, not good except it be spread."
[9]

Communism arose as a reaction to a distribution of wealth in which a few lived in luxury
while the masses lived in extreme poverty. In The Communist
Manifesto Marx and Engels wrote "From each according to his ability, to each according to
his need."
[10]
While the ideas of Marx have nominally been embraced by various states
(Russia, Cuba, Vietnam and China in the 20th century), Marxist utopia remains elusive.
[11]

On the other hand, the combination of labor movements, technology, and social
liberalism has diminished extreme poverty in the developed world today, though extremes of
wealth and poverty continue in the Third World.
[12]

In the Outlook on the Global Agenda 2014 from the World Economic Forum the widening
income disparities come second as a worldwide risk.
[13][14]

Charity[edit]
In addition to government efforts to redistribute wealth, the tradition of individual charity is a
voluntary means of wealth transference. There are also many voluntary charitable
organizations making concerted efforts to aid those in need.
Wealth surveys[edit]
Many countries have national wealth surveys, for example:
The British Wealth and Assets Survey
The Italian Survey on Household Income and Wealth
The US Survey of Consumer Finances
Canada Survey of Financial Security
Please add more examples
21st century[edit]
At the end of the 20th century, wealth was concentrated among the G8 and
Western industrialized nations, along with several Asian and OPEC nations. An Energy
Information Administration report stated that OPEC member nations were projected to earn
$1.251 trillion in 2008, from their oil exports, due to the record crude prices.
[15]

A study by the World Institute for Development Economics Research at United Nations
University reports that the richest 1% of adults alone owned 40% of global assets in the year
2000, and that the richest 10% of adults accounted for 85% of the world total. The bottom
half of the world adult population owned 1% of global wealth.
[16]
Moreover, another study
found that the richest 2% own more than half of global household assets.
[17]

Real estate[edit]
While sizeable numbers of households own no land, few have no income. For example, 10%
of land owners (all corporations) in Baltimore, Maryland own 58% of the taxable land value.
The bottom 10% of those who own any land own less than 1% of the total land value.
[18]
This
form of Gini coefficient analysis has been used to support Land value taxation.
In the United States[edit]
See also: Wealth inequality in the United States, Income inequality in the United
States and Wealth in the United States


The distribution of net wealth in the United States, 2007. The chart is divided into the top 20% (blue),
upper middle 20% (orange), middle 20% (red), and bottom 40% (green). (The net wealth of many
people in the lowest 20% is negative because of debt.)
[19]

According to the Congressional Budget Office, between 1979 and 2007 incomes of the top
1% of Americans grew by an average of 275%. During the same time period, the 60% of
Americans in the middle of the income scale saw their income rise by 40%. Since 1979 the
average pre-tax income for the bottom 90% of households has decreased by $900, while
that of the top 1% increased by over $700,000, as federal taxation became less progressive.
Political factors that led to top tax rate cuts such as those by Reagan and Thatcher in the
1980's in the United States and the United Kingdom - where accompanied by other
legislative changes, such as deregulation, which may have caused top incomes to rise, not
least on account of the impetus they gave to the growth of the financial services...and legal
services sector.
[20]

From 1992-2007 the top 400 income earners in the U.S. saw their income increase 392%
and their average tax rate reduced by 37%.
[21]
In 2009, the average income of the top 1%
was $960,000 with a minimum income of $343,927.
[22][23][24]

In 2007 the richest 1% of the American population owned 34.6% of the country's total
wealth, and the next 19% owned 50.5%. The top 20% of Americans owned 85% of the
country's wealth and the bottom 80% of the population owned 15%. From 1922 to 2010, the
share of the top 1% varied from 19.7% to 44.2%, the big drop being associated with the drop
in the stock market in the late 1970s. Ignoring the period where the stock market was
depressed (1976-1980) and the period when the stock market was overvalued (1929), the
share of wealth of the richest 1% remained extremely stable, at about a third of the total
wealth.
[25]
Financial inequality was greater than inequality in total wealth, with the top 1% of
the population owning 42.7%, the next 19% of Americans owning 50.3%, and the bottom
80% owning 7%.
[26]
However, after the Great Recession which started in 2007, the share of
total wealth owned by the top 1% of the population grew from 34.6% to 37.1%, and that
owned by the top 20% of Americans grew from 85% to 87.7%. The Great Recession also
caused a drop of 36.1% in median household wealth but a drop of only 11.1% for the top
1%, further widening the gap between the 1% and the 99%.
[19][25][26]
During the economic
expansion between 2002 and 2007, the income of the top 1% grew 10 times faster than the
income of the bottom 90%. In this period 66% of total income gains went to the 1%, who in
2007 had a larger share of total income than at any time since 1928.
Top 1% incomes grew by 31.4% while bottom 99% incomes grew only by 0.4% from 2009 to
2012. Hence, the top 1% captured 95% of the income gains in the first three years of the
recovery.
[27]

Dan Ariely and Michael Norton show in a study (2011) that US citizens across the political
spectrum significantly underestimate the current US wealth inequality and would prefer a
more egalitarian distribution of wealth, raising questions about ideological disputes over
issues like taxation and welfare.
[28]

Year Bottom 99% Top 1%
1922 63.3% 36.7%
1929 55.8% 44.2%
1933 66.7% 33.3%
1939 63.6% 36.4%
1945 70.2% 29.8%
1949 72.9% 27.1%
1953 68.8% 31.2%
1962 68.2% 31.8%
1965 65.6% 34.4%
1969 68.9% 31.1%
1972 70.9% 29.1%
1976 80.1% 19.9%
1979 79.5% 20.5%
1981 75.2% 24.8%
1983 69.1% 30.9%
1986 68.1% 31.9%
1989 64.3% 35.7%
1992 62.8% 37.2%
1995 61.5% 38.5%
1998 61.9% 38.1%
2001 66.6% 33.4%
2004 65.7% 34.3%
2007 65.4% 34.6%
2010 64.6% 35.4%
Sources: 1922-1989 data from Wolff (1996), 1992-2010 data from Wolff (2012)
[25]

Data, charts, and graphs[edit]
Wealth, Income, and Power by G. William Domhoff
PowerPoint presentation: Inequalities of Development - Lorenz curve and Gini
coefficient
The World Distribution of Household Wealth
[16]

Article on The World Distribution of Household Wealth report.
The Federal Reserve Board - Survey of Consumer Finances
Survey of Consumer Finances 1998-2004 charts - pdf
Survey of Consumer Finances 1998-2004 data
and resulting Gini indices for mean incomes: 1989: 51.1, 1992: 47.8, 1995: 49.0,
1998: 50.4, 2001: 52.6, 2004: 51.4
Changes in the Distribution of Wealth in the U.S., 1989-2001
Report on Net Worth and Asset Ownership of Households
Projections of the Number of Households in the U.S. 1995-2010
The System of National Accounts (SNA): comparison of U.S. national accounts statistics
with those of other countries
World Trade Organization: Resources
Champagne Glass infographic of global wealth distribution from Dalton Conley's You
May Ask Yourself: An Introduction to Thinking Like a Sociologist textbook which was
adapted from the 1992 UNDP original
World distribution of wealth[edit]
Main article: World distribution of wealth

world distribution of wealth by country (PPP)

world distribution of wealth by region (PPP)

world distribution of wealth by country (exchange rates)

world distribution of wealth by region (exchange rates)
Data for the following table obtained from UNU-WIDER World Distribution of Household
Wealth Report (The University of California also hosts a copy of the report)
Table[edit]
Region
Percent of
world
population
Percent of
world net
worth
(PPP)
Percent of
world net
worth
(exchange
rates)
Percent of
world GDP
(PPP)
Percent of
world GDP
(exchange
rates)
North America 5.17 27.1 34.39 23.88 33.67
Central/South America 8.52 6.51 4.34 8.49 6.44
Europe 9.62 26.42 29.19 22.8 32.4
Africa 10.66 1.52 0.54 2.36 1.01
Middle East 9.88 5.07 3.13 5.69 4.1
Asia 52.18 29.4 25.61 31.07 24.1
Other 3.14 3.7 2.56 5.4 3.38
SOURCE: G. William Domhoff
[25]


World distribution of financial wealth[edit]
In 2007, 147 companies controlled nearly 40 percent of the monetary value of all
transnational corporations.
[29]

The richest 1% of adults in the world own 40% of the planet's wealth, according to the largest study
yet of wealth distribution. The report also finds that those in financial services and the internet
sectors predominate among the super rich.
Europe, the US and some Asia Pacific nations account for most of the extremely wealthy. More than
a third live in the US. Japan accounts for 27% of the total, the UK for 6% and France for 5%.
The UK is also third in terms of per capita wealth. UK residents are found to have on average
$127,000 (64,000) each in assets, with Japanese and American citizens having, respectively,
$181,000 and $144,000. All data relate to the year 2000.
The global study - from the World Institute for Development Economics Research of the United
Nations - is the first to chart wealth distribution in every country as opposed to just income, for which
more comprehensive date is available. It included all the most significant components of household
wealth, including financial assets and debts, land, buildings and other tangible property. Together
these total $125 trillion globally.
Anthony Shorrocks, director of the research institute at the United Nations University, in New York,
led the study. He affirmed that the existence of a nest egg provided an insurance policy that helped
people cope with unforeseen events such as ill health or a lost job. Capital allowed people to drag
themselves out of poverty, he added. "In some ways, wealth is more important to people in poorer
countries than in richer countries." It was more difficult in developing countries to set up a business
because it was harder to borrow start-up funds, he said.
His team used detailed data from 38 countries, but had to rely on incomplete information from the
rest.
The report found the richest 10% of adults accounted for 85% of the world total of global assets. Half
the world's adult population, however, owned barely 1% of global wealth. Near the bottom of the list
were India, with per capita wealth of $1,100, and Indonesia with assets per head of $1,400.
Many African nations as well as North Korea and the poorer Asia Pacific nations were places where
the worst off lived.
"These levels of inequality are grotesque," said Duncan Green, head of research at Oxfam. "It is
impossible to justify such vast wealth when 800 million people go to bed hungry every night. The
good news is that redistribution would only have to be relatively small. Such are the vast assets of
the rich that giving up a small part of their wealth could transform the lives of millions."
Madsen Pirie, director of the Adam Smith Institute, a free-market thinktank, disagreed that
distribution of global wealth was unfair. He said: "The implicit assumption behind this is that there is
a supply of wealth in the world and some people have too much of that supply. In fact wealth is a
dynamic, it is constantly created. We should not be asking who in the past has created wealth and
how can we get it off them." He said that instead the question should be how more and more people
could create wealth.
Ruth Lea, director of the Centre for Policy Studies, a thinkthank set up by Margaret Thatcher, said
that although she supported the goal of making poverty history she did not think increasing aid to
poorer countries was the answer. "It's no use throwing lots of aid at countries that are basically
dysfunctional," she said.
The UN report was issued as the Swiss magazine Bilan released a list of the richest Swiss residents.
Ingvar Kamprad, the founder of Ikea, topped the list with an estimated fortune of $21bn.
Global wealth inequality: top 1% own 41%; top 10%
own 86%; bottom half own just 1%
Global wealth highest in
history despite downturn
Liveblog
0 8 22 36 0

by Guy Bentley
October 9, 2013, 11:46am
Despite the financial crisis of 2008 and the difficulties in the Eurozone, global wealth has more
than doubled since 2000, reaching over 150 trillion, according to the latest global wealth report
from Credit Suisse.
Economic growth in developing countries and rising populations have played a significant part in
the figures. Aggregate total wealth rocketed past the pre-crisis peak in 2010 and has been
climbing higher ever since. Average wealth per adult has reached 32,167 after a rise of 4.9 per
cent during the year to mid-2013.
Change in household wealth by region 2012-2013:
The countries experiencing the largest wealth gains of over 620bn included the US, Japan,
China, Germany and France. The UK came sixth in total wealth gains with over 125bn.
A large part of the gains made in the US were due to rising house prices and a strengthening
equity market driving up the Dow Jones. The US increased the global wealth stock by 5.05
trillion, a 54 per cent increase since the downturn of 2008.
Switzerland remains the richest nation in the world, on average, with wealth rising to 319,805
per adult. Australia, Norway and Luxembourg all saw an increase in wealth per adult and
retained their respective second, third and fourth places from 2012.
In terms of global distribution, once debts have been subtracted, 2493 in assets will place an
adult in the top half of the worlds wealthiest citizens. Wealth of 46,000 is required for an adult
to reach the top 10 per cent of global wealth holders, while personal wealth of 469,422 places
an adult in the top one per cent.
The report forecasts that wealth will rise by close to 40 per cent in the next five years with
emerging markets to increase their share of global wealth to 23 per cent by 2018. China is
expected to see household wealth dramatically, growing by 10.1 per cent over the next five
years.
- See more at: http://www.cityam.com/blog/1381315591/global-wealth-highest-history-despite-
downturn#sthash.EFIN10Ht.dpuf
Just 8.4% of all the 5bn adults in the world own 83.4% of all household wealth (thats property and financial assets, like
stocks, shares and cash in the bank). About 393 million people have net worth (thats wealth after all debt is accounted
for) of over $100,000, thats 10% own 86% of all household wealth! But $100,000 may not seem that much, if you own a
house in any G7 country without any mortgage. So many millions in the UK or the US are in the top 10% of global wealth
holders. This shows just how little two-thirds of adults in the world have under $10,000 of net wealth each and billions
have nothing at all.

This is not annual income but just wealth in other words, 3.2bn adults own virtually nothing at all. At the other end of
the spectrum, just 32m people own $98trn in wealth or 41% of all household wealth or more than $1m each. And just
98,700 people with ultra-high net worth have more than $50 million each and of these 33,900 are worth over $100
million each. Half of these super-rich live in the US.

All this is in a new global wealth report published Credit Suisse Bank and authored by Professors Anthony Shorrocks and
Jim Davies see the report here (global wealth report and the database wealth database). The professors find that
global wealth has reached a new all-time high of $241 trillion, up 4.9% since last year, with the US accounting for most of
the rise. Average wealth hit a new peak of $51,600 per adult but the distribution of that wealth is wildly unequal.
There is nothing new in this report in one sense because Tony Shorrocks previously authored a UN report back in 2010
(see my post, http://thenextrecession.wordpress.com/2010/01/10/20/) that found virtually the same wealth inequality
and Branko Milanovic also found similar figures in various World Bank studies. But what is also interesting is that
Professor Shorrocks finds that there is little or no social mobility between rich and poor over generations 87% of
people stay rich or poor, hardly moving up or down the wealth pyramid.
This inequality is mirrored within each country (see UK wealth distribution). In the UK, aggregate
total wealth (including private pension wealth but excluding state pension wealth) of all private
households in Great Britain was 10.3 trillion. And the wealthiest 10 per cent of households were 4.4
times wealthier than the bottom 50 per cent of households combined. The wealthiest 20 per cent of
households owned 62 per cent of total aggregate household wealth.
Moreover, according to the Credit Suisse report, the American dream or the British idea of rags to riches is a
myth. Two-thirds of American adults are in the same wealth decile as their parents were. Even globally, while some
individuals do alternate wildly between rags and riches, many stay for their whole lifetime in the same wealth
neighborhood for people of their age. Dividing the population into wealth quintiles, about half the population remains in
the same quintile after ten years and we estimate that at least a third would be in the same quintile after thirty years.
Global wealth is projected to rise by nearly 40% over the next five years, reaching $334 trillion by 2018. Emerging
markets will be responsible for 29% of the growth, although they account for just 21% of current wealth, while China will
account for nearly 50% of the increase in emerging economies wealth. Wealth will primarily be driven by growth in the
middle segment, but the number of millionaires will also grow markedly over the next five years.
All class societies have generated extremes of inequality in wealth and income. That is the point
of a rich elite (whether feudal landlords, Asiatic warlords, Incan and Egyptian religious castes,
Roman slave owners etc) usurping control of the surplus produced by labour. But past class
societies considered that normal and god-given. Capitalism on the other hand talks about free
markets, equal exchange and equality of opportunity. But the reality is no different from
previous class societies.


December 7, 2006 A new study on The World Distribution of Household Wealth by the
Helsinki-based World Institute for Development Economics Research of the United
Nations University was launched earlier this week. The study shows the richest 2% of
adults in the world own more than half of global household wealth. The most
comprehensive study of personal wealth ever undertaken also reports that the richest
1% of adults alone owned 40% of global assets in the year 2000, and that the richest
10% of adults accounted for 85% of the world total. In contrast, the bottom half of the
world adult population owned barely 1% of global wealth. The research finds that assets
of US$2,200 per adult placed a household in the top half of the world wealth distribution
in the year 2000. To be among the richest 10% of adults in the world required
US$61,000 in assets, and more than US$500,000 was needed to belong to the richest
1%, a group which with 37 million members worldwide is far from an exclusive
club.




View all

The UNU-WIDER study is the first of its kind to cover all countries in the world and all
major components of household wealth, including financial assets and debts, land,
buildings and other tangible property.
One should be clear about what is meant by wealth, say co-authors James Davies of
the University of Western Ontario, Anthony Shorrocks and Susanna Sandstrom of UNU-
WIDER, and Edward Wolff of New York University. In everyday conversation the term
wealth often signifies little more than money income. On other occasions economists
use wealth to refer to the value of all household resources, including human
capabilities.
We use the term in its long-established sense of net worth: the value of physical and
financial assets less debts. In this respect, wealth represents the ownership of capital.
Although capital is only one part of personal resources, it is widely believed to have a
disproportionate impact on household wellbeing and economic success, and more
broadly on economic development and growth.
Wealth levels across countries
Using currency exchange rates, global household wealth amounted to US$125 trillion in
the year 2000, equivalent to roughly three times the value of total global production
(GDP) or to US$20,500 per person. Adjusting for differences in the cost-of-living across
nations raises the value of wealth to US$26,000 per capita when measured in terms of
purchasing power parity dollars (PPP$).
The world map shows per capita wealth of different countries. (Figure 1: World Wealth
Levels in Year 2000) Average wealth amounted to $144,000 per person in the USA in
year 2000, and $181,000 in Japan. Lower down among countries with wealth data are
India, with per capita assets of $1,100, and Indonesia with $1,400 per capita.
Per capita wealth levels vary widely across countries. Even within the group of high-
income OECD nations the range includes $37,000 for New Zealand and $70,000 for
Denmark and $127,000 for the UK.
Wealth is heavily concentrated in North America, Europe, and high income Asia-Pacific
countries. People in these countries collectively hold almost 90% of total world wealth.
(Figure 2: Regional Wealth Shares) Although North America has only 6% of the world
adult population, it accounts for 34% of household wealth. Europe and high income
Asia-Pacific countries also own disproportionate amounts of wealth. In contrast, the
overall share of wealth owned by people in Africa, China, India, and other lower income
countries in Asia is considerably less than their population share, sometimes by a factor
of more than ten. (Figure 3: Population and Wealth Shares by Region)
The study finds wealth to be more unequally distributed than income across countries.
High income countries tend to have a bigger share of world wealth than of world GDP.
The reverse is true of middle- and low-income nations. However, there are exceptions
to this rule, for example the Nordic region and transition countries like the Czech
Republic and Poland.
The authors of the UNU-WIDER study explain that in Eastern European countries
private wealth is on the rise, but has still not reached very high levels. Assets like
private pensions and life insurance are held by relatively few households. In the Nordic
countries, the social security system provides generous public pensions that may
depress wealth accumulation.
World wealth inequality
The concentration of wealth within countries varies significantly but is generally high.
The share of the top 10% ranges from around 40% in China to 70% in the United
States, and higher still in other countries. The Gini value, which measures inequality on
a scale from zero to one, gives numbers in the range from 35% to 45% for income
inequality in most countries. In contrast, Gini values for wealth inequality are usually
between 65% and 75%, and sometimes exceed 80%. Two high wealth economies,
Japan and the United States, show very different patterns of wealth inequality, with
Japan having a wealth Gini of 55% and the USA a wealth Gini of around 80%.
Wealth inequality for the world as a whole is higher still. The study estimates that the
global wealth Gini for adults is 89%. The same degree of inequality would be obtained if
one person in a group of ten takes 99% of the total pie and the other nine share the
remaining 1%.
Where do the worlds wealthy live?
According to the study, almost all of the worlds richest individuals live in North America,
Europe, and rich Asia-Pacific countries. Each of these groups of countries contribute
about one third of the members of the worlds wealthiest 10%. (Figure 4: Regional
Composition of Global Wealth Distribution)
China occupies much of the middle third of the global wealth distribution, while India,
Africa, and low-income Asian countries dominate the bottom third.
For all developing regions of the world, the share of population exceeds the share of
global wealth, which in turn exceeds the share of members of the wealthiest groups.
(Figure 3: Population and Wealth Shares by Region)
A small number of countries account for most of the wealthiest 10% in the world. One
quarter are Americans and another 20% are Japanese. (Figure 5: Percentage
Membership of Wealthiest 10%)
These two countries feature even more strongly among the richest 1% of individuals in
the world, with 37% residing in the USA and 27% in Japan. (Figure 6: Percentage
Membership of Wealthiest 1%)
According to Anthony Shorrocks, a countrys representation in the rich persons club
depends on three factors: the size of the population, average wealth, and wealth
inequality.
The USA and Japan stand out, he says, because they have large populations and
high average wealth. Although Switzerland and Luxembourg have high average wealth,
their populations are small. China on the other hand fails to feature strongly among the
super-rich because average wealth is modest and wealth is evenly spread by
international standards. However, China is already likely to have more wealthy residents
than our data reveals for the year 2000, and membership of the super-rich seems set to
rise fast in the next decade.
Composition of household wealth
The UNU-WIDER study shows major international differences in the composition of
assets, resulting from different influences on household behaviour such as market
structure, regulation, and cultural preferences.
Real property, particularly land and farm assets, are more important in less developed
countries. (Figure 7: Asset Composition in Selected Countries) This reflects not only the
greater importance of agriculture, but also immature financial institutions.
The study also reveals striking differences in the types of financial assets owned.
Savings accounts feature strongly in transition economies and in some rich Asian
countries, while share-holdings and other types of financial assets are more evident in
rich countries in the West. (Figure 8: Composition of Financial Wealth in Selected
Countries)
According to the authors of the UNU-WIDER study, savings accounts tend to be
favoured in Asian countries because there appears to be a strong preference for
liquidity and a lack of confidence in financial markets. Other types of financial assets are
more prominent in countries like the UK and USA which have well developed financial
sectors and which rely heavily on private pensions.
Surprisingly, household debt is relatively unimportant in poor countries. As the authors
of the study point out: While many poor people in poor countries are in debt, their debts
are relatively small in total. This is mainly due to the absence of financial institutions that
allow households to incur large mortgage and consumer debts, as is increasingly the
situation in rich countries
The authors go on to note that many people in high-income countries have negative net
worth andsomewhat paradoxicallyare among the poorest people in the world in
terms of household wealth.
The World Institute for Development Economics Research of the United Nations
University (UNU-WIDER) was established in 1985. The institute undertakes
multidisciplinary research and policy analysis on structural changes affecting the living
conditions of the worlds poorest people; provides a forum for professional interaction
and the advocacy of policies leading to robust, equitable, and environmentally
sustainable growth; and promotes capacity strengthening and training for scholars and
government officials in the field of economic and social policy making.




inShare11

By now it should be common knowledge to everyone that in American society, the top
wealthiest 1 percentile controls all the political power, holds half the wealth, and pays what
is claimed to be the bulk of the taxes (despite mile wide tax loopholes and Swiss bank
accounts). The rest of the population is merely filler, programmed to buy every latest self-
cannibalizing iteration of the iPad/Pod while never again paying their mortgage and
brainwashed to watch 2 hours of prime time TV commercials to keep it distracted from the
fact that the last time America was a democracy was around the time the Wright brothers
were arguing the pros and cons of frequent flier programs. So far so good. But what about
the rest of the world? How is wealth stratified in a global perspective? Where do the "rich"
live? What kind of wealth is controlled by various countries? Where are the Ultra High Net
Worth people? For answers to all these questions, and much more, confirming that just like
in America, the wealthiest 0.5% control over 35% of world wealth, Credit Suisse has
compiled and released its latest "Global Wealth Report." The findings are summarized here.
The first figure shows world wealth by region. The US, with its wealth of about $50 trillion,
accounts for 25% of total world wealth, which at last check was about $200 trillion. And
yes, Europe as a region has a slightly greater wealth portion (32%) than does America
(31%).

When it comes to geographic distribution, it is to be expected that North America will have
the greatest proportion of people in the ultra wealthy category. Indeed, the chart below
confirms this.

Drilling down into asset composition in various countries, it becomes obvious why the Fed is
so focused on keeping the stock market high. With America being the wealthiest country in
the world, and the bulk of US wealth held in financial assets, offset by a material amount of
debt, which confirms that a deflationary spiral would be the end for the "wealth effect" so
desired by Ben Bernanke. More from CS: "Consider first the relative importance of financial
versus non-financial assets, and the size of debt. Expressed as a percentage of gross
household assets, the pattern clearly differs markedly between poorer and richer countries
and regions. In developing countries (see Figure 1), for example India and Indonesia, it is
common for 80% or more of total assets to be held in the form of non-financial assets,
largely housing and farms. A high proportion of real property is also evident in transition
countries in Europe, reflecting in part the wholesale privatization of housing in the 1990s. As
countries develop and grow, the importance of non-financial assets tends to decline, so that
the share in China, for instance, is now close to half. In the richest countries, financial
assets typically account for more than half of household wealth. There are interesting
exceptions to this general pattern. Recent robust house price rises have propelled the share
of non-financial assets above 60% in France and some other major European countries.
South Africa, on the other hand, is an outlier in the developing world, with exceptionally
high holdings of financial assets: the figure of 80% exceeds the share found in both the
United States and Japan." In other words, the more "developed" the world becomes, the
greater the amount of wealth tied into the perpetuation of the Ponzi lies. Small wonder why
so few in charge are willing to actually do anything that changes the status quo.

Next, it is time to drill down in the specific composition of the financial assets.
Figure 2 provides more detail, showing the breakdown of financial assets into three
categories: currency and deposits, equities (all shares and other equities held directly by
households), and other financial assets for selected countries. To add further detail, in most
countries the reserves of life insurance companies and pension funds form the largest
component of other financial assets. The composition of financial assets differs
considerably across countries, especially with regard to the importance of shares and other
equities. One interesting trend we note is that equities are not always a large component of
household financial wealth, even in countries with very active financial markets. In the
United Kingdom and Japan, for example, equities account for just 13% and 9% of total
financial assets respectively. In contrast, they make up 37% and 43% of financial assets in
Sweden and the USA, respectively. Broadly speaking, the relative importance of currency
and deposits falls as that of bonds and equities increases. On the other hand, the portfolio
share of other financial assets does not vary a lot, staying in the range of about 40%
45%. However, when we come to the UK, Japan and Colombia, which have the lowest
portfolio share of equities, the pattern breaks down. The UK has a moderate currency and
deposits share, but the largest other financial assets share, reflecting large life insurance
and pension reserves. Colombia also has more in the form of other financial assets than is
typical. Japan, on the other hand, which has a strong tradition of saving in deposit form,
has a very large currency and deposits share and only a 35% share of other financial
assets.

An interesting detour looks at gender distribution for asset holders in the US and the UK. As
the chart below shows, in the UK women appear to hold more risky assets than men.

Looking at the history of global wealth per adult, net worth peaked just before the first
ponzi/credit/housing bubble popped, confirming that a major portion of the then-record
$50K/adult net wealth was imaginary. Yet it may have far more to drop: as CS says,
"despite the financial crisis, the past decade has in fact been a relatively benign period for
household wealth accumulation. Global net worth per adult rose 43% from USD 30,700 in
the year 2000 to USD 43,800 by mid-2010. Since the number of adults increased from 3.6
billion to 4.4 billion over this period, aggregate household wealth rose by 72%. One
important factor here was the depreciation of the dollar against most major
currencies, which accounts for part of the rise in dollar-denominated values, but
average net worth still increased by 24% when exchange rates are
held constant." The next question is how much latent dollar devaluation has been accrued
to this point and how much more is due to only gradually emerge.

The next chart is rather self-explanatory. The richest nations, with wealth in 2010 above
USD 100,000 per adult, are found in North America, Western Europe, and among the rich
Asian-Pacific and Middle East countries. They are topped by Switzerland, Norway, Australia,
Singapore and France, each of which records wealth per adult above USD 250,000.
Average wealth in other major economies such as the USA, Japan, the United Kingdom and
Canada also exceeds USD 200,000.

And some more detail on the various wealth regions:

Emerging wealth: The band of wealth from USD 25,000 to USD 100,000 covers many recent
EU entrants (Poland, Hungary, Czech Republic, Slovakia, Latvia, Lithuania, Estonia, Cyprus)
and important Latin American countries (Mexico, Brazil, Chile), along with a number of
Middle Eastern nations (Lebanon, Saudi Arabia, Bahrain).
Frontier wealth: The main transition nations outside the EU, including China, Russia,
Belarus, Georgia, Kazakhstan and Mongolia, fall in the USD 5,000 to USD 25,000 range,
together with some of their Far East neighbors (Indonesia, Thailand) and most of Latin
America (Colombia, Ecuador, Peru, El Salvador). The group also contains a number of
African nations at the southernmost tip (South Africa, Botswana, Namibia) and on the
Mediterranean coast (Morocco, Algeria, Tunisia, Egypt).
Finally, the category below USD 5,000 comprises almost all of South Asia, including India,
Pakistan, Bangladesh and Nepal, and almost all of Central and West Africa.
Next is a pie chart of with a detailed break down of wealth distribution by region.

Credit Suisse provides a look at geographic wealth distribution by decile:
To be among the wealthiest half of the world, an adult needs only USD 4,000 in assets,
once debts have been subtracted. However, each adult requires more than USD 72,000 to
belong to the top 10% of global wealth holders and more than USD 588,000 to be a
member of the top 1%. The bottom half of the global population together possess less than
2% of global wealth, although wealth is growing fast for some members of this segment. In
sharp contrast, the richest 10% own 83% of the worlds wealth, with the top 1% alone
accounting for 43% of global assets. Figure 4 shows how the regions of the world are
represented amongst the wealth deciles. Unsurprisingly for example, North America and
Europe together make up the lions share of the top wealth decile (10%). China has
relatively few representatives at the very top and bottom of the global wealth distribution,
but dominates the middle section, supplying more than a third of those in deciles 48. The
sizeable presence of China in the middle section reflects not only its population size and
moderate average wealth level, but also relatively low wealth inequality. Chinas position in
the global picture has shifted upwards in the past decade as a consequence of a strong
record of growth, rising asset values and the appreciation of the renminbi relative to the US
dollar. China already has more people in the top 10% of global wealth holders than any
country except for the USA, Japan and Germany, and is poised to overtake both Germany
and Japan in the near future.

Next is the chart that everyone has seen as it pertains to America,
but few have seen in terms of the entire world. Per CS, Figure 1 shows
The global wealth pyramid in striking detail. It is made up of a solid
base of low wealth holders with upper tiers occupied by fewer and fewer
people. We estimate that 3 billion individuals more than two thirds
of the global adult population have wealth below USD 10,000. A further
billion adults (24% of the world population) are placed in the USD
10,000100,000 range, leaving 358 million adults (8% of the world
population) with assets above USD 100,000. Figures for mid-2010
indicate that 24.2 million adults are above the threshold for dollar
millionaires. While they make up less than 1% of the global adult
population, they own more than a third of global household wealth. More
specifically, individuals with wealth above USD 50 million are estimated
to number 81,000 worldwide.

Some more details on the various tiers of the pyramid:
Bottom of the pyramid
The
various tiers of the wealth pyramid have distinctive characteristics.
The base level is spread broadly across countries. It has significant
membership in all regions of the world, and spans a wide variety of
family circumstances. The upper wealth limit of USD 10,000 is a modest
sum in developed countries, excluding almost all adults who own houses,
with or without a mortgage. Nevertheless, a surprisingly large number of
individuals in advanced countries have limited savings or other assets.
A
high proportion are young people with little opportunity or interest in
accumulating wealth. In fact, limited amounts of tangible assets
combined with credit card debts and student loans lead many young people
to record negative net worth. In Denmark and Sweden, for example, 30%
of the population report negative wealth. This is an important and often
overlooked segment, not least in the context of the credit crisis.
Low
wealth is also a common feature of older age groups, particularly for
those individuals suffering ill health and exposed to high medical
bills. In fact, the means testing applied to many state benefits,
especially contributions to the cost of residential homes, provides an
incentive to shed wealth. Nevertheless, relatively few people in rich
countries have net worth below USD 10,000 throughout their adult life.
In essence, membership of the base section of the global wealth pyramid
is a transient, lifecycle phenomenon for most citizens in the developed
world.
The situation in low-income countries is different. More
than 90% of the adult population in India and Africa fall in this band;
in many low-income African countries, the fraction of the population is
close to 100%. However, the cost of living is usually much lower. For a
resident of India, for instance, assets of USD 10,000 would be
equivalent to about USD 30,000 to a resident of the United States. In
much of the developing world, this is enough to own a house or land
albeit possibly with uncertain property rights and to have a
comfortable lifestyle by local standards.
Middle of the pyramid
The
billion adults in the USD 10,000100,000 range form the middle class
from the perspective of global wealth. With USD 32 trillion in total
wealth, it certainly carries economic weight. This tier has the most
regionally balanced membership, although China now contributes almost a
third of the total. The wealth range would cover the median person over
most of his adult life in high income countries. In middle income
countries it would apply to a middle class person in middle age.
However, in low-income countries only those in the top decile qualify,
restricting membership to significant landowners, successful
businessmen, professionals and the like.
High segment of the pyramid
When
we consider the high segment of the wealth pyramid the group of
adults whose net worth exceeds USD 100,000 the regional composition
begins to change. With almost 358 million adults worldwide, this group
is far from exclusive. But the typical member of the group is very
different in different parts of the world. In high income countries, the
threshold of USD 100,000 is well within the reach of middle-class
adults once careers have been established. In contrast, residents from
low-income countries would need to belong to the top percentile of
wealth holders, so only the exceptionally successful, well endowed or
well connected qualify.
The regional contrast shows up in the
fact that North America, Europe and the Asia-Pacific regions account for
92% of the global membership of the USD 100,000+ group, with Europe
alone home to 39% of the total. As far as individual countries are
concerned, the membership ranking depends on three factors: the
population size, the average wealth level, and wealth inequality within
the country. Only 15 countries host more than 1% of the global
membership. The USA comes top with 23% of the total. All three factors
reinforce each other in this instance: a large population combining with
high mean wealth and an unequal wealth distribution. Japan is a strong
runner-up, the only country at present to seriously challenge the
hegemony of the USA in the global wealth ranking. Although its relative
position has declined since the year 2000 due to lackluster stock market
and housing market performance, Japan is still home to 15% of
individuals with wealth above USD 100,000.
Top of the pyramid
At
the top of the pyramid, we find the worlds millionaires, where we
again witness a slightly different pattern of membership. The proportion
of members from the United States rises sharply to 41%, and the share
of members from outside of the North America, Europe and Asia-Pacific
regions falls to just 6%. The relative positions of most countries move
downwards, but there are exceptions. The French share is estimated to
double to 9%, while Sweden and Switzerland are each now credited with
more than 1% of the global membership.
And next, is a detailed look at the very top of the pyramid: those individuals which have
over 1 million in net worth.
To assemble details of the pattern of wealth holdings above USD 1 million requires a high
degree of ingenuity. The usual sources of data official statistics and sample surveys
become increasingly incomplete and unreliable at high wealth levels. A growing number of
publications have followed the example of Forbes magazine by constructing rich lists,
which attempt to value the assets of particular named individuals at the apex of the wealth
pyramid. But very little is known about the global pattern of asset holdings in the high net
worth (HNW greater than USD 1 million) and ultra high net worth (UHNW from USD 50
million upwards) range.
We bridge this gap by exploiting well-known statistical regularities in the top wealth tail.
Using only data from traditional sources in the public domain yields a pattern of global
wealth holdings in the USD 250,000 to USD 5 million range, which, when projected onward,
predicts about 1000 dollar billionaires for mid-2010. Although not exactly comparable, this
number is very close to the figure of 1,011 billionaire holdings reported by Forbes magazine
for February 2010. Making use of the regional affiliation recorded in rich lists allows us to
merge the top tail details with data on the level and distribution of wealth derived from
traditional sources in order to generate a regional breakdown of HNW and UHNW
individuals. At this time, we do not attempt to estimate the pattern of holdings across
particular countries, except China and India which are treated as separate regions.
However, as a rule of thumb, residents of the USA account for about 90% of the figure for
North America.
The base of the wealth pyramid is occupied by people from all countries of the world at
various stages of their lifecycle. In contrast, HNW and UHNW individuals are heavily
concentrated in particular regions and countries, but the members tend to share a much
more similar lifestyle, often participating in the same global markets for high coupon
consumption items. The wealth portfolios of individuals are also likely to be similar,
dominated by financial assets and, in particular, equity holdings in public companies traded
in international markets. For these reasons, using official exchange rates to value assets is
more appropriate, rather than using local price levels to compare wealth holdings.
Our figures for mid-2010 indicate that there were 24.5 million HNW individuals with wealth
from USD 1 million to USD 50 million, of whom the vast majority (22 million) fall in the USD
15 million range. North America dominates the residence ranking, accounting for 11.1
million HNW individuals (45% of the total). Europe accounts for 7.8 million (31.7%) and 4.1
million reside in Asia-Pacific countries other than China and India. We estimate that there
are now more than 800,000 HNW individuals in China, each worth between USD 1 million
and USD 50 million (3.3% of the global total). India, Africa and Latin America together host
the remaining 740,000 HNW individuals (3.0% of the total).

The take home message is that the wealthiest people in the world have the bulk of their
wealth entrenched in the current system and any dramatic overhaul or reset of the status
quo will be met by the stiff resistance of those who can summon fleet of jets, private
armies, and even Fed chairmen on a whim. Whether anyone will have the wherewithal to
confront the broken system under such conditions remains to be seen.
And for those seeing more granular detail by country, below are the profiles of the 15 or so
wealhtiest countries.