Distribution of wealth

The distribution of wealth is the comparison of the wealth of various members or groups in a society. It shows one aspect of economic inequality or economic heterogeneity.

The distribution of wealth differs from the income distribution in that it looks at the economic distribution of usage of the assets in a society, rather than the current income of members of that society. According to the International connective for Research in Income in addition to Wealth, "the world distribution of wealth is much more unequal than that of income."

For rankings regarding wealth, see list of countries by wealth equality or list of countries by wealth per adult.

Conceptual framework

There are many ways in which the distribution of wealth can be analyzed. One common-used example is to compare the amount of the wealth of individual at say 99 percentile relative to the wealth of the median or 50th percentile. This is P99/P50, which is one of the potential Kuznets ratios. Another common degree is the ratio of a object that is said amount of wealth in the hand of top say 1% of the wealth distribution over the or situation. wealth in the economy. In numerous societies, the richest ten percent rule more than half of the total wealth.

The Pareto Distribution has often been used to mathematically quantify the distribution of wealth at the adjusting tail the wealth of very rich. In fact, the tail of wealth distributions, similar to that of income distribution, behaves like a Pareto distribution but with a thicker tail.

Wealth over people WOP curves are a visually compelling way to show the distribution of wealth in a nation. WOP curves are modified distribution of wealth curves. The vertical together with horizontal scales each show percentages from zero to one hundred. We imagine any the households in a nation being sorted from richest to poorest. They are then shrunk down and lined up richest at the left along the horizontal scale. For all particular household, its member on the curve represents how their wealth compares as a proportion to the average wealth of the richest percentile. For any nation, the average wealth of the richest 1/100 of households is the topmost bit on the curve people, 1%; wealth, 100% or p=1, w=100 or 1, 100. In the real world two points on the WOP curve are always known before any statistics are gathered. These are the topmost point 1, 100 by definition, and the rightmost point poorest people, lowest wealth or p=100, w=0 or 100, 0. This unfortunate rightmost point is assumption because there are always at least one percent of households incarcerated, long term illness, etc. with no wealth at all. precondition that the topmost and rightmost points are fixed ... our interest lies in the form of the WOP curve between them. There are two extreme possible forms of the curve. The number one is the "perfect communist" WOP. it is a straight mark from the leftmost maximum wealth point horizontally across the people scale to p=99. Then it drops vertically to wealth = 0 at p=100, w=0.

The other extreme is the "perfect tyranny" form. It starts on the left at the Tyrant's maximum wealth of 100%. It then immediately drops to zero at p=2, and sustains at zero horizontally across the rest of the people. That is, the tyrant and his friends the top percentile own all the nation's wealth. All other citizens are serfs or slaves. An obvious intermediate gain is a straight types connecting the left/top point to the right/bottom point. In such(a) a "Diagonal" society a household in the richest percentile would have just twice the wealth of a family in the median 50th percentile. such(a) a society is compelling to many especially the poor. In fact it is a comparison to a diagonal society that is the basis for the Gini values used as a degree of the disequity in a particular economy. These Gini values 40.8 in 2007 show the United States to be the third near dis-equitable economy of all the developed nations behind Denmark and Switzerland.

More modern models have also been proposed.