by Catherine Mulbrandon
in Other
Looking at the effect the increase in housing prices on people’s perception of wealth.
So again, has the housing bubble created a wealth illusion? It does seem that many Americans feel wealthier because of the large increases in home equity in recent years. However, it is difficult to gauge how people feel about their wealth. The most obvious way to demonstrate that we feel wealthier because of increases in home equity is by measuring how much equity many Americans have pulled out of their homes in recent years. As we have seen in this paper, the numbers are enormous. Most people will not use their homes as a piggybank unless they are feeling pretty good about your wealth (or if they are very desperate – it doesn’t appear that many people fall into this category). Based on this, it is safe to say that most of us are feeling wealthier these days because of the soaring prices of our homes.
by Catherine Mulbrandon
in Other
A researcher at the World Bank is looking at the income distribution around the world.
True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone: calculates, for the first time ever, inequality among world citizens using detailed household survey data from more than 100 countries. Shows that inequality increased between 1988 and 1993.
[tags] world income inequality [/tags]
by Catherine Mulbrandon
in Other
If you are looking for a possible explanation for dramatic change in income I showed in my previous set of posts. Here is an abstract from a paper by the same authors:
This paper presents new homogeneous series on top wealth shares from 1916 to 2000 in the United States using estate tax return data. Top wealth shares were very high at the beginning of the period but have been hit sharply by the Great Depression, the New Deal, and World War II shocks. Those shocks have had permanent effects. Following a decline in the 1970s, top wealth shares recovered in the early 1980s, but they are still much lower in 2000 than in the early decades of the century. Most of the changes we document are concentrated among the very top wealth holders with much smaller movements for groups below the top 0.1%. Consistent with the Survey of Consumer Finances results, top wealth shares estimated from Estate Tax Returns display no significant increase since 1995. Evidence from the Forbes 400 richest Americans suggests that only the super-rich have experienced significant gains relative to the average over the last decade. Our results are consistent with the decreased importance of capital income at the top of the income distribution documented by Piketty and Saez (2003), and suggest that the rentier class of the early century is not yet reconstituted. The most plausible explanations for the facts are perhaps the development of progressive income and estate taxation which has dramatically impaired the ability of large wealth holders to maintain their fortunes, and the democratization of stock ownership which now spreads stock market gains and losses much more widely than in the past.
Top Wealth Shares in the United States, 1916-2000: Evidence from Estate Tax Returns
by Catherine Mulbrandon
in Other
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