How Fat is the Top Tail of the Wealth Distribution?

31 Pages Posted: 5 Jun 2018

Multiple version iconThere are 2 versions of this paper

Date Written: June 2018

Abstract

Differential unit non‐response in household wealth surveys biases estimates of top tail wealth shares downward. Using Monte Carlo evidence, I show that adding only a few extreme observations to wealth surveys is sufficient to remove the downward bias. Combining extreme wealth observations from Forbes World's billionaires with the Survey of Consumer Finances, the Wealth and Assets Survey, and the Household Finance and Consumption Survey, I provide new improved estimates of top tail wealth in the United States, the United Kingdom, and nine euro area countries. These new estimates indicate significantly higher top wealth shares than those calculated from the wealth surveys alone.

Keywords: non‐response, wealth distribution, Survey of Consumer Finances, Wealth and Assets Survey, Household Finance and Consumption Survey

JEL Classification: D31

Suggested Citation

Vermeulen, Philip, How Fat is the Top Tail of the Wealth Distribution? (June 2018). Review of Income and Wealth, Vol. 64, Issue 2, pp. 357-387, 2018. Available at SSRN: https://ssrn.com/abstract=3189537 or http://dx.doi.org/10.1111/roiw.12279

Philip Vermeulen (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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