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Tuesday, December 05, 2006

Top Heavy

How concentrated is the world's wealth?:

Two per cent hold half of world’s assets, by Chris Giles, Financial Times: Personal wealth is distributed so unevenly across the world that the richest two per cent of adults own more than 50 per cent of the world’s assets while the poorest half hold only 1 per cent of wealth. ...

Adults with more than $2,200 of assets were in the top half of the global wealth league table, while those with more than $61,000 were in the top 10 per cent, according to the data from the World Institute for Development Economics Research of the United Nations University (UNU-Wider).

To belong to the top 1 per cent of the world’s wealthiest adults you would need more than $500,000, something that 37m adults have achieved. ...

Almost 90 per cent of the world’s wealth is held in North America, Europe and high-income Asian and Pacific countries, such as Japan and Australia.

While North America has 6 per cent of the world’s adult population, it accounts for 34 per cent of household wealth.

The concentration of wealth in different countries varies considerably, with the top 10 per cent in the US holding 70 per cent of the country’s wealth, compared with 61 per cent in France, 56 per cent in the UK, 44 per cent in Germany and 39 per cent in Japan. ...

In developing countries, property, particularly land and farm assets are important, while cash savings tend to dominate in middle-income counties.

Only in certain advanced countries such as the US and the UK with developed financial sectors is there a strong appetite for holding equities and other more sophisticated financial assets.

Debt is also low in poor countries because financial institutions do not exist to allow people to borrow.

In contrast, the authors say “many people in high-income countries have negative net worth and, somewhat paradoxically, are among the poorest people in the world in terms of household wealth.” ...

For changes in the distribution of world income over time, see here (the statistics above are for wealth, while these are for income). There have been improvements in the worldwide distribution of income in recent decades, but there's still much to be done.

    Posted by on Tuesday, December 5, 2006 at 01:06 PM in Economics, Income Distribution | Permalink  TrackBack (0)  Comments (28)

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