Multidimensional Wealth Inequality: A Hybrid Approach toward Distributional National Accounts in Europe

Waltl, Sofie R. (2020) Multidimensional Wealth Inequality: A Hybrid Approach toward Distributional National Accounts in Europe. INEQ Working Paper Series, 16. WU Vienna University of Economics and Business, Vienna.

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Abstract

Distributional National Accounts (DINA) link macroeconomic aggregates with distributional information enabling a better understanding of distributional implications of macroeconomic developments and facilitate cross-country comparisons of inequality. This article proposes a practically feasible framework to allocate components of wealth to different sections of society and serves two functions: a comprehensive measure of net worth and its distribution, and a link to macroeconomic statistics. The article compiles DINA by breaking down twelve components of marketable wealth by wealth and income groups, as well as three major functions of wealth for Austria, Finland, France, Germany and Spain. The three functions of wealth considered are (i) precautionary saving, (ii) own use of housing assets and (iii) income generation via the ownership of businesses or landlordship. The resulting multidimensional wealth distributions reveal large heterogeneity in inequality and help understand (institutional) differences across countries and time. Results are top-tail adjusted using Pareto and Generalized Pareto models, and combining survey data (HFCS) with rich lists, or top wealth shares derived from tax data and leaked information on wealth held in offshore tax havens.

Item Type: Paper
Keywords: Distributional National Accounts (DINA); Wealth Distribution; Micro-macro linkage; HFCS; Top Tail Adjustment
Classification Codes: JEL D31, D91, E01, R31
Divisions: Forschungsinstitute > Verteilungsfragen
Depositing User: Klaudia Marschalek
Date Deposited: 20 Apr 2020 14:16
Last Modified: 20 Apr 2020 14:16
URI: https://epub.wu.ac.at/id/eprint/7560

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