Wealth inequality in Central and Eastern Europe: evidence from joined household survey and rich lists’ data

Michał Brzeziński, Katarzyna Sałach-Dróżdż and Marcin Wroński

No 2019-09, Working Papers from Faculty of Economic Sciences, University of Warsaw

Abstract: We study how the problem of the ‘missing rich’, the underrepresentation of the wealthiest in household surveys, affects wealth inequality estimates for the post-socialist countries of Central and Eastern Europe (CEE). The survey data from the second wave of the Household Finance and Consumption Survey (HFCS) are joined with the data from the national rich lists for Estonia, Hungary, Latvia, Poland and Slovakia. Pareto distribution is fitted to the joined survey and rich lists’ data to impute the missing observations for the largest wealth values. We provide the first estimates of the top-corrected wealth inequality for the CEE region in 2013/2014. Despite a short period of wealth accumulation during the post-1989 market economy period, our adjustment procedure reveals that wealth inequality in the Baltic countries is comparable to that of Germany (one of the most wealth unequal countries in Europe), while in Poland and Hungary it has reached levels observed in France or Spain. We discuss possible explanations of these findings with reference to the speed and range of privatization processes, extent of income inequality, and the role of inheritances and wealth taxes in the region.

Keywords: wealth inequality; missing rich; Pareto distribution; rich lists; Forbes; Household Finance and Consumption Survey; transition countries; Central and Eastern Europe (search for similar items in EconPapers)
JEL-codes: C46 D31 D63 P36 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2019
New Economics Papers: this item is included in nep-cis, nep-eur and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:war:wpaper:2019-09

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