Arbeitspapier

How wealthy are the rich?

Underreporting and undersampling biases in top tail wealth, although widely acknowledged, have not been statistically quantified so far, essentially because they are not readily observable. Here we exploit the functional form of power law-like regimes in top tail wealth to derive analytical expressions for these biases, and employ German microdata from a popular survey and rich list to illustrate that tiny differences in non-response rates lead to tail wealth estimates that differ by an order of magnitude, in our case ranging from one to nine trillion euros. Underreporting seriously compounds the problem, and we find that the estimation of totals in scale-free systems oftentimes tends to be spurious. Our findings also suggest that recent debates on the existence of scale- or type-dependence in returns to wealth are ill-posed because the available data cannot discriminate between scale- or typedependence on the one hand, and statistical biases on the other. Yet both economic theory and mathematical formalism indicate that sampling and reporting biases are more plausible explanations for the observed data than scale- or type-dependence.

ISBN
978-3-943153-87-3
Sprache
Englisch

Erschienen in
Series: BERG Working Paper Series ; No. 166

Klassifikation
Wirtschaft
Specific Distributions; Specific Statistics
Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
Personal Income, Wealth, and Their Distributions
Thema
Wealth inequality
stochastic growth
differential non-response
Hill estimator
tail index bias

Ereignis
Geistige Schöpfung
(wer)
Schulz, Jan
Milaković, Mishael
Ereignis
Veröffentlichung
(wer)
Bamberg University, Bamberg Economic Research Group (BERG)
(wo)
Bamberg
(wann)
2020

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Schulz, Jan
  • Milaković, Mishael
  • Bamberg University, Bamberg Economic Research Group (BERG)

Entstanden

  • 2020

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