The bottom line and the top line: insights from poverty measurement for developing an extreme wealth line

Tania Burchardt, Michael Vaughan and Ingrid Robeyns

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: There is increasing interest globally in making extreme wealth more visible, governable, and accountable for the harms it generates. One contribution to that agenda would be the development of a social indicator of extreme wealth, based on an extreme wealth line. This paper considers what lessons the last century of scholarship on poverty definition and measurement – which has led to a powerful suite of analytical and advocacy tools - holds for the development of extreme wealth as a social indicator. Analogies and disanalogies between poverty and extreme wealth are discussed, taking in turn each of the six steps required to define a social indicator – purpose, concept, evaluative space, metric, threshold and statistics. As social indicators, both poverty and extreme wealth have as their purpose to provide the means to monitor and evaluate social and economic arrangements. The underlying concept in both cases is harm, although the nature, mechanisms and incidence of harm are distinct. Poverty has been assessed uni- and multidimensionally using inputs, outputs, outcomes and capabilities. Extreme wealth could likewise, in principle, be captured in any of these ways. The paper argues that an adjusted input measure (wealth, taking into account contextual factors affecting its conversion into potential harms) as a proxy of the capability for harm may be the most fruitful to pursue. Several of the existing approaches to setting a poverty threshold are relevant to methods for determining an extreme wealth line, including evidence on when lack of, or excess, resources start to cause unacceptable harms of different kinds. Finally, a total or average ‘excess wealth’ statistic could be developed alongside a count of the number of people above an extreme wealth line, just as poverty gap statistics have augmented the information contained in poverty headcounts. The paper concludes that poverty measurement provides a useful roadmap for the development of a social indicator of extreme wealth and identifies two key priorities for further research: the collation of evidence quantifying the relationship between levels of wealth and different kinds of harm, and investigating the contextual factors that influence this relationship.

Keywords: extreme wealth; poverty; social indicator; wealth inequality (search for similar items in EconPapers)
JEL-codes: D31 I32 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2026-06
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