Heterogeneity in Returns to Wealth and the Measurement of Wealth Inequality

Andreas Fagereng, Luigi Guiso, Davide Malacrino and Luigi Pistaferri
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Luigi Pistaferri: Stanford University and NBER

No 1601, EIEF Working Papers Series from Einaudi Institute for Economics and Finance (EIEF)

Abstract: Lacking a long time series on the assets of the very wealthy, Saez and Zucman (2015) use US tax records to obtain estimates of wealth holdings by capitalizing asset income from tax returns. They document marked upward trends in wealth concentration. We use data on tax returns and actual wealth holdings from tax records for the whole Norwegian population to test the robustness of the methodology. We document that measures of wealth based on the capitalization approach can lead to misleading conclusions about the level and the dynamics of wealth inequality if returns are heterogeneous and even moderately correlated with wealth.

Pages: 17 pages
Date: 2016, Revised 2016-01
New Economics Papers: this item is included in nep-eec and nep-pbe
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Citations: View citations in EconPapers (87)

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Related works:
Journal Article: Heterogeneity in Returns to Wealth and the Measurement of Wealth Inequality (2016)
Working Paper: Heterogeneity in Returns to Wealth and the Measurement of Wealth Inequality (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:eie:wpaper:1601

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