Top Wealth Is Distributed Weibull, Not Pareto

Coen Teulings and Simon Toussaint

No 18634, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study the shape of the global wealth distribution, using the Forbes List of Billionaires. We develop simple statistics based on ratios of log moments to test the default assumption of a Pareto distribution, which is strongly rejected. Hazard rates show that the log-transformed data instead follow a Gompertz distribution, which means that the data in levels follow a truncated-Weibull distribution. We further apply our model to the U.S. city size distribution and the U.S. firm size distribution. These distributions also show a rejection of Pareto in favor of (truncated-)Weibull. We discuss some theoretical and practical implications of our results.

JEL-codes: D3 E2 G5 (search for similar items in EconPapers)
Date: 2023-11
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