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The distribution of wealth is a 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 ownership of the assets in a society, rather than the current income of members of that society. According to the International Association for Research in Income and Wealth, "the world distribution of wealth is much more unequal than that of income."[1]

For one set of rankings regarding wealth, see list of countries by wealth per adult.

## Definition of wealth

Wealth of an individual is defined as net worth, exposed as: wealth = assetsliabilities

A broader definition of wealth, which is rarely used in the measurement of wealth inequality, also includes human capital. For example, the United Nations definition of inclusive wealth is a monetary measure which includes the sum of natural, human and physical assets.[2][3]

The relation between wealth, income, and expenses is: :change of wealth = saving = income − consumption(expenses). If an individual has a large income but also large expenses, the net effect of that income on her or his wealth could be small or even negative. The term wealth should not be confused with rich. These two terms describe different but related things. Wealth consists of those items of economic value that an individual owns, while rich is an inflow of items of economic value. (See Stock and flow.)

## 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 measure is the ratio of total amount of wealth in the hand of top say 1% of the wealth distribution over the total wealth in the economy. In many societies, the richest ten percent control more than half of the total wealth.

Pareto Distribution has often been used to mathematically quantify the distribution of wealth at the right tail (the wealth of very rich). In fact, the tail of wealth distribution, similar to the one of income distribution, behave like Pareto distribution but with ticker 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 and horizontal scales each show percentages from zero to one hundred. We imagine all 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 any particular household, its point 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 point 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 given because there are always at least one percent of households (incarcerated, long term illness, etc.) with no wealth at all. Given 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 first is the "perfect communist" WOP. It is a straight line 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 continues 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 form is a straight line connecting the left/top point to the right/bottom point. In such 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 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 measure of the disequity in a particular economy. These Gini values (40.8 in 2007) show the United States to be the third most dis-equitable economy of all the developed nations (behind Denmark and Switzerland).

More sophisticated models have also been proposed.[4]

## Inequality

Share of wealth globally by year, as seen by Oxfam,[5] based on the net worth[6]

### Wealth distribution pyramid

Personal wealth varies across adults for many reasons. Some individuals with little wealth may be at early stages in their careers, with little chance or motivation to accumulate assets. Others may have suffered business setbacks or personal misfortunes, or live in parts of the world where opportunities for wealth creation are severely limited. At the other end of the spectrum, there are individuals who have acquired a large wealth through different ways. In Western countries, the most typical way of becoming wealthy is entrepreneurship (estimated three quarters of new millionaires). Other typical way (covering most of the remaining quarter) is pursuing a career with the end goal of becoming a C-level executive, a leading professional in a specific field (such as a doctor, lawyer, engineer) or a top corporate sales person. Only around 1% of new millionaires acquire their wealth via other means such as professional sports, show business, art, inventions, investing, inheritance or lottery.

Pyramid of global wealth distribution in 2013[7]

In 2013, Credit Suisse prepared a wealth pyramid infographic (shown right). Personal assets were calculated in net worth, meaning wealth would be negated by having any mortgages.[6] It has a large base of low wealth holders, alongside upper tiers occupied by progressively fewer people. In 2013 Credit-suisse estimate that 3.2 billion individuals – more than two thirds of adults in the world – have wealth below US\$10,000. A further one billion (adult population) fall within the 10,000 – US\$100,000 range. While the average wealth holding is modest in the base and middle segments of the pyramid, their total wealth amounts to US\$40 trillion, underlining the potential for novel consumer products and innovative financial services targeted at this often neglected segment.[7]

The pyramid shows that:

• half of the world's net wealth belongs to the top 1%,
• top 10% of adults hold 85%, while the bottom 90% hold the remaining 15% of the world's total wealth,
• top 30% of adults hold 97% of the total wealth.

#### Wealth distribution in 2012

According to the OECD in 2012 the top 0.6% of world population (consisting of adults with more than US\$1 million in assets) or the 42 million richest people in the world held 39.3% of world wealth. The next 4.4% (311 million people) held 32.3% of world wealth. The bottom 95% held 28.4% of world wealth. The large gaps of the report get by the Gini index to 0.893, and are larger than gaps in global income inequality, measured in 2009 at 0.38.[8] For example, in 2012 the bottom 60% of the world population held same wealth in 2012 as the people on Forbes' Richest list consisting of 1,226 richest billionaires of the world.

### 21st century

Countries by total wealth (trillions USD), Credit Suisse

At the end of the 20th century, wealth was concentrated among the G8 and Western industrialized nations, along with several Asian and OPEC nations.

#### Wealth inequality

A study by the World Institute for Development Economics Research at United Nations University reports that the richest 1% of adults alone owned 40% of global assets in the year 2000, and that the richest 10% of adults accounted for 85% of the world total. The bottom half of the world adult population owned 1% of global wealth.[9] Moreover, another study found that the richest 2% own more than half of global household assets.[10]

#### Real estate

While sizeable numbers of households own no land, few have no income. For example, the top 10% of land owners (all corporations) in Baltimore, Maryland own 58% of the taxable land value. The bottom 10% of those who own any land own less than 1% of the total land value.[11] This form of analysis as well as Gini coefficient analysis has been used to support land value taxation.

#### Credit Suisse Report – Wealth Distribution & Gini (2018)

This table was created from information provided by the Credit Suisse, Research Institute's "Global Wealth Databook", published 2018.[12]

(1,000)
Wealth per
Distribution of adults (%) by wealth range (USD) Gini
(%)
Mean Median Under 10k 10k – 100k 100k – 1M Over 1M Total
Afghanistan 16,245 643 290 99.6 0.4 0.0 0.0 100 64.4
Albania 2,201 16,957 8,157 56.0 42.4 1.6 0.0 100 62.9
Algeria 26,565 9,077 3,175 79.1 19.9 1.0 0.0 100 75.8
Angola 12,934 7,921 3,175 79.9 19.5 0.6 0.0 100 71.5
Antigua and Barbuda 70 19,497 4,712 73.0 23.9 2.9 0.2 100 83.8
Argentina 29,953 11,530 3,176 80.9 17.9 1.1 0.1 100 79.2
Armenia 2,175 7,583 3,391 80.7 18.8 0.5 0.0 100 64.5
Aruba 79 45,612 14,901 40.0 50.0 9.7 0.3 100 73.0
Australia 18,433 411,060 191,453 6.1 27.1 59.9 7.0 100 65.8
Austria 7,075 231,368 70,074 25.2 30.4 41.1 3.2 100 76.4
Azerbaijan 6,915 7,530 3,410 81.1 18.4 0.5 0.0 100 64.3
Bahamas 288 47,822 11,385 48.0 45.1 6.3 0.6 100 84.2
Bahrain 1,153 38,882 13,385 43.5 51.0 5.2 0.3 100 76.4
Bangladesh 102,793 2,332 1,006 97.2 2.7 0.1 0.0 100 67.1
Barbados 213 28,762 8,522 55.0 40.2 4.6 0.2 100 78.8
Belarus 7,427 1,514 740 98.8 1.2 0.0 0.0 100 61.4
Belgium 8,869 313,045 163,429 17.0 21.2 57.0 4.8 100 65.9
Belize 221 8,961 2,298 84.0 14.9 1.1 0.0 100 81.5
Benin 5,300 2,972 1,237 95.1 4.7 0.1 0.0 100 68.9
Bolivia 6,530 7,306 2,111 83.9 15.4 0.7 0.0 100 77.9
Bosnia and Herzegovina 2,805 14,110 6,762 61.7 37.1 1.2 0.0 100 63.2
Botswana 1,375 10,793 3,652 76.5 22.1 1.4 0.0 100 78.3
Brazil 147,836 16,664 4,263 74.0 24.1 1.8 0.1 100 82.3
Brunei 298 42,925 14,154 43.0 51.2 5.4 0.4 100 78.6
Bulgaria 5,752 23,984 11,013 47.0 49.9 3.0 0.1 100 64.7
Burkina Faso 8,571 1,317 569 98.7 1.3 0.0 0.0 100 67.4
Burundi 4,972 321 142 99.9 0.1 0.0 0.0 100 65.4
Cambodia 9,598 3,404 1,365 94.8 5.0 0.2 0.0 100 70.4
Cameroon 11,413 2,282 897 96.5 3.3 0.1 0.0 100 72.5
Canada 28,858 288,263 106,342 20.7 28.2 46.6 4.5 100 72.6
Central African Republic 2,132 960 332 98.8 1.1 0.0 0.0 100 76.8
Chad 6,319 735 294 99.5 0.5 0.0 0.0 100 71.5
Chile 13,166 62,222 23,812 36.0 52.6 10.9 0.5 100 77.3
China 1,085,003 47,810 16,333 33.4 59.1 7.2 0.3 100 71.4
Colombia 33,751 18,239 4,937 71.1 26.8 2.0 0.1 100 80.7
Comoros 412 2,729 971 95.5 4.3 0.2 0.0 100 76.6
Congo, Dem. Rep. 35,869 331 123 99.8 0.2 0.0 0.0 100 74.3
Congo, Rep. 2,546 3,361 1,219 94.5 5.3 0.2 0.0 100 75.5
Costa Rica 3,490 31,717 9,813 50.7 43.6 5.5 0.2 100 76.9
Cote d'Ivoire 11,501 2,958 1,119 95.2 4.7 0.2 0.0 100 73.8
Croatia 3,342 35,951 17,131 33.5 60.9 5.4 0.2 100 63.1
Cyprus 909 100,308 10,384 48.0 41.0 9.9 1.1 100 89.8
Czech Republic 8,529 61,489 17,018 30.7 60.6 8.2 0.5 100 75.8
Denmark 4,450 286,712 60,999 35.6 20.4 38.5 5.5 100 83.6
Djibouti 569 5,389 2,123 88.0 11.7 0.3 0.0 100 70.8
Dominica 54 23,937 5,548 68.0 28.2 3.6 0.2 100 84.0
Ecuador 10,507 11,068 3,211 79.8 18.9 1.2 0.0 100 77.6
Egypt 57,160 3,717 346 96.3 3.4 0.3 0.0 100 90.9
El Salvador 4,024 15,219 4,616 72.8 25.3 1.9 0.1 100 75.9
Equatorial Guinea 695 9,398 3,057 79.0 19.8 1.2 0.0 100 78.1
Eritrea 2,462 3,412 1,499 94.2 5.6 0.1 0.0 100 66.0
Estonia 1,034 57,806 18,895 31.5 58.6 9.4 0.5 100 71.1
Eswatini 719 4,219 1,388 93.6 6.1 0.3 0.0 100 77.6
Ethiopia 51,036 167 78 100.0 0.0 0.0 0.0 100 61.2
Fiji 574 8,031 3,254 80.0 19.3 0.6 0.0 100 69.4
Finland 4,327 161,062 45,606 21.0 47.0 30.1 1.9 100 76.7
France 49,478 280,580 106,827 13.9 34.5 47.2 4.3 100 68.7
Gabon 1,124 16,342 6,973 61.5 36.7 1.8 0.0 100 70.0
Gambia 936 889 327 99.0 1.0 0.0 0.0 100 75.5
Georgia 2,940 16,725 7,078 59.7 38.5 1.7 0.1 100 67.8
Germany 67,470 214,893 35,169 40.6 21.6 34.5 3.2 100 81.6
Ghana 14,972 934 398 99.3 0.7 0.0 0.0 100 68.2
Greece 9,019 108,127 40,789 14.0 60.9 24.1 1.0 100 68.2
Grenada 71 16,081 3,704 76.0 21.5 2.4 0.1 100 84.2
Guinea 6,077 816 323 99.4 0.6 0.0 0.0 100 71.6
Guinea-Bissau 909 701 296 99.6 0.4 0.0 0.0 100 69.7
Guyana 475 4,620 1,454 90.2 9.4 0.4 0.0 100 75.0
Haiti 6,300 2,472 619 96.0 3.8 0.2 0.0 100 82.0
Honduras 5,417 10,675 2,887 81.3 17.4 1.3 0.1 100 80.4
Hong Kong 6,224 244,672 58,905 15.0 50.1 32.0 2.9 100 81.9
Hungary 7,826 37,594 15,026 38.4 55.5 6.0 0.2 100 66.2
Iceland 248 555,726 203,847 17.0 17.0 55.5 10.5 100 73.1
India 850,210 7,024 1,289 90.8 8.6 0.6 0.0 100 85.4
Indonesia 170,221 8,919 1,597 85.4 13.7 0.8 0.1 100 84.0
Iran 57,018 4,779 1,899 91.6 8.1 0.3 0.0 100 70.5
Iraq 19,160 14,192 6,515 62.7 36.2 1.1 0.0 100 62.5
Ireland 3,460 232,952 72,473 34.0 23.5 38.7 3.8 100 83.0
Israel 5,405 174,129 54,966 17.8 48.7 31.4 2.1 100 76.6
Italy 48,527 217,787 79,239 8.0 47.4 41.8 2.8 100 68.9
Jamaica 1,983 8,924 2,507 83.5 15.5 1.0 0.0 100 78.8
Japan 105,108 227,235 103,861 5.3 43.6 48.4 2.7 100 63.1
Jordan 5,371 13,328 5,745 66.7 32.1 1.1 0.0 100 67.7
Kazakhstan 12,086 5,122 152 96.9 2.7 0.3 0.0 100 95.2
Kenya 24,546 2,306 880 96.5 3.4 0.1 0.0 100 73.2
Korea 41,381 171,739 65,463 2.0 57.8 38.3 1.8 100 67.0
Kuwait 3,045 91,374 26,278 34.5 48.0 16.5 1.0 100 80.9
Kyrgyzstan 3,668 4,200 1,797 93.0 6.8 0.2 0.0 100 67.3
Laos 3,946 5,215 1,567 93.6 5.9 0.5 0.0 100 79.7
Latvia 1,557 33,958 7,540 55.0 38.6 6.2 0.2 100 78.8
Lebanon 4,162 33,726 3,932 77.4 18.8 3.5 0.3 100 88.9
Lesotho 1,208 2,640 857 95.7 4.2 0.2 0.0 100 79.5
Liberia 2,279 1,015 410 99.0 0.9 0.0 0.0 100 70.9
Libya 4,085 61,701 26,939 28.2 56.4 15.1 0.3 100 66.5
Lithuania 2,306 24,600 11,161 46.7 50.1 3.2 0.1 100 65.5
Luxembourg 456 412,127 164,284 0.0 36.0 57.2 6.8 100 66.3
Macedonia 1,612 12,551 5,640 68.0 30.8 1.2 0.0 100 65.5
Madagascar 12,471 432 179 99.8 0.2 0.0 0.0 100 70.2
Malawi 8,493 141 54 99.9 0.1 0.0 0.0 100 73.3
Malaysia 21,372 27,970 7,000 60.6 36.2 3.0 0.2 100 82.0
Maldives 308 6,808 2,702 84.0 15.4 0.6 0.0 100 71.8
Mali 7,834 1,094 468 99.0 0.9 0.0 0.0 100 68.2
Malta 347 140,629 76,116 14.0 48.0 36.7 1.3 100 63.1
Mauritania 2,239 1,756 764 98.1 1.8 0.0 0.0 100 66.7
Mauritius 943 35,668 16,472 37.0 56.7 6.2 0.1 100 64.0
Mexico 83,850 20,620 5,784 65.7 31.8 2.3 0.1 100 80.0
Mongolia 1,960 10,295 4,616 73.5 25.7 0.8 0.0 100 65.9
Montenegro 475 24,746 12,060 45.0 51.9 3.0 0.1 100 63.1
Morocco 23,218 9,305 2,426 85.1 14.0 0.8 0.1 100 80.2
Mozambique 13,360 482 201 99.8 0.2 0.0 0.0 100 70.0
Myanmar 34,334 1,515 739 98.9 1.1 0.0 0.0 100 58.2
Namibia 1,356 11,704 3,944 75.5 22.9 1.5 0.1 100 77.4
Nepal 17,150 2,054 834 97.4 2.5 0.1 0.0 100 69.9
Netherlands 13,260 253,205 114,935 15.0 32.6 48.8 3.6 100 73.6
New Zealand 3,486 289,798 98,613 10.5 40.0 45.1 4.4 100 70.8
Nicaragua 3,858 3,721 1,054 93.0 6.7 0.3 0.0 100 77.8
Niger 8,579 863 379 99.4 0.5 0.0 0.0 100 66.0
Nigeria 88,264 1,572 208 98.6 1.3 0.1 0.0 100 89.4
Norway 4,057 291,103 80,054 27.6 25.6 42.2 4.6 100 79.1
Oman 3,450 41,804 14,304 43.8 50.2 5.6 0.4 100 78.8
Pakistan 110,625 3,816 1,711 93.8 6.0 0.2 0.0 100 65.0
Panama 2,655 28,897 8,358 55.3 39.8 4.6 0.2 100 79.5
Papua New Guinea 4,488 6,254 2,117 90.0 9.4 0.6 0.0 100 76.0
Paraguay 4,181 9,075 2,589 83.6 15.4 1.0 0.0 100 78.5
Peru 20,766 22,508 6,036 65.1 32.2 2.4 0.2 100 79.5
Philippines 62,043 8,349 1,915 89.0 10.2 0.7 0.1 100 82.6
Poland 30,626 31,794 10,572 48.4 47.5 3.9 0.2 100 72.2
Portugal 8,377 109,362 31,313 19.9 57.4 21.5 1.1 100 73.6
Qatar 2,177 121,638 59,978 12.0 53.3 33.8 0.8 100 61.5
Romania 15,582 20,321 6,658 62.0 35.4 2.5 0.1 100 72.8
Russia 112,039 19,997 2,739 80.0 17.9 1.9 0.2 100 87.5
Rwanda 6,123 660 254 99.5 0.5 0.0 0.0 100 72.8
Samoa 105 18,154 6,516 63.0 34.5 2.4 0.1 100 73.9
Sao Tome and Principe 96 2,987 1,311 95.3 4.6 0.1 0.0 100 65.0
Saudi Arabia 22,629 43,174 12,847 45.4 48.9 5.3 0.4 100 81.0
Senegal 7,525 3,077 1,270 94.8 5.0 0.1 0.0 100 70.5
Serbia 6,809 10,743 4,903 72.4 26.7 0.9 0.0 100 65.3
Seychelles 68 48,652 21,349 35.0 54.0 10.8 0.2 100 67.9
Sierra Leone 3,596 355 153 99.8 0.2 0.0 0.0 100 67.1
Singapore 4,552 283,118 91,656 13.8 38.2 44.0 4.0 100 75.8
Slovakia 4,339 34,781 21,203 19.4 76.7 3.8 0.1 100 49.8
Slovenia 1,676 79,097 34,043 13.5 69.0 16.9 0.6 100 64.6
Solomon Islands 312 9,035 3,835 78.0 21.2 0.8 0.0 100 68.9
South Africa 35,434 22,191 6,726 63.7 33.1 3.1 0.1 100 80.6
Spain 37,410 191,177 87,188 17.2 37.1 43.5 2.3 100 69.7
Sri Lanka 14,311 5,758 2,415 86.9 12.8 0.4 0.0 100 68.7
St. Lucia 131 11,146 3,525 78.0 20.8 1.2 0.0 100 74.1
St. Vincent and the Grenadines 75 10,882 2,547 82.0 16.5 1.4 0.1 100 83.3
Sudan 19,846 530 231 99.7 0.2 0.0 0.0 100 66.5
Suriname 368 5,198 1,147 92.1 7.3 0.6 0.0 100 84.6
Sweden 7,689 249,765 39,709 36.0 29.5 30.0 4.5 100 86.5
Switzerland 6,811 530,244 183,339 13.7 23.6 52.1 10.6 100 74.1
Syria 9,477 1,190 500 98.9 1.0 0.0 0.0 100 69.0
Taiwan 19,139 212,375 78,177 15.7 40.5 41.1 2.7 100 73.0
Tajikistan 4,995 1,364 618 98.8 1.1 0.0 0.0 100 64.6
Tanzania 25,944 865 383 99.5 0.5 0.0 0.0 100 65.0
Thailand 52,639 9,969 1,085 91.7 7.5 0.7 0.1 100 90.2
Timor-Leste 584 2,513 1,303 97.7 2.2 0.1 0.0 100 54.1
Togo 3,800 2,324 917 96.5 3.4 0.1 0.0 100 71.9
Tonga 58 15,255 6,796 62.0 36.5 1.5 0.0 100 67.1
Trinidad and Tobago 1,002 15,719 5,076 70.5 27.5 1.9 0.1 100 74.8
Tunisia 8,014 14,932 6,226 64.3 34.1 1.6 0.0 100 68.3
Turkey 54,411 18,555 2,677 82.0 16.0 1.9 0.1 100 87.1
Turkmenistan 3,548 10,446 4,824 72.0 27.3 0.7 0.0 100 61.9
Uganda 17,941 710 287 99.5 0.5 0.0 0.0 100 71.4
Ukraine 35,267 1,563 40 99.0 0.8 0.1 0.0 100 95.5
United Arab Emirates 7,752 88,173 25,267 35.5 47.5 16.0 1.0 100 81.4
United Kingdom 50,919 279,048 97,169 17.5 33.1 44.6 4.8 100 74.7
United States 242,972 403,974 61,667 28.4 30.8 33.6 7.1 100 85.2
Uruguay 2,484 39,194 12,556 44.3 47.9 7.5 0.3 100 74.1
Vanuatu 152 5,355 2,346 88.0 11.7 0.3 0.0 100 67.6
Vietnam 67,300 4,560 1,806 93.1 6.6 0.3 0.0 100 70.8
Yemen 14,122 1,967 594 97.0 2.9 0.1 0.0 100 80.1
Zambia 7,641 1,197 390 98.4 1.6 0.1 0.0 100 78.7
Zimbabwe 8,103 3,216 1,317 94.5 5.3 0.1 0.0 100 70.7

### In the United States

<div style="border:solid transparent;position:absolute;width:100px;line-height:0;

Distribution of net worth in the United States (2007). The net wealth of many people in the lowest 20% is negative because of debt.[13]

Top 1% (35%)
Next 4% (27%)
Next 5% (11%)
Next 10% (12%)
Upper Middle 20% (11%)
Middle 20% (4%)
Bottom 40% (<1%)

According to PolitiFact, in 2011 the 400 wealthiest Americans "have more wealth than half of all Americans combined."[14][15][16][17] Inherited wealth may help explain why many Americans who have become rich may have had a "substantial head start".[18][19] In September 2012, according to the Institute for Policy Studies, "over 60 percent" of the Forbes richest 400 Americans "grew up in substantial privilege".[20]

In 2007, the richest 1% of the American population owned 34.6% of the country's total wealth (excluding human capital),[clarification needed] and the next 19% owned 50.5%. The top 20% of Americans owned 85% of the country's wealth and the bottom 80% of the population owned 15%. From 1922 to 2010, the share of the top 1% varied from 19.7% to 44.2%, the big drop being associated with the drop in the stock market in the late 1970s. Ignoring the period where the stock market was depressed (1976–1980) and the period when the stock market was overvalued (1929), the share of wealth of the richest 1% remained extremely stable, at about a third of the total wealth.[21] Financial inequality was greater than inequality in total wealth, with the top 1% of the population owning 42.7%, the next 19% of Americans owning 50.3%, and the bottom 80% owning 7%.[22] However, after the Great Recession which started in 2007, the share of total wealth owned by the top 1% of the population grew from 34.6% to 37.1%, and that owned by the top 20% of Americans grew from 85% to 87.7%. The Great Recession also caused a drop of 36.1% in median household wealth but a drop of only 11.1% for the top 1%, further widening the gap between the 1% and the 99%.[13][21][22] During the economic expansion between 2002 and 2007, the income of the top 1% grew 10 times faster than the income of the bottom 90%. In this period 66% of total income gains went to the 1%, who in 2007 had a larger share of total income than at any time since 1928.

Dan Ariely and Michael Norton show in a study (2011) that US citizens across the political spectrum significantly underestimate the current US wealth inequality and would prefer a more egalitarian distribution of wealth, raising questions about ideological disputes over issues like taxation and welfare.[23]

Wealth proportion by population by year (including homes)[21][24]
Year Bottom
99%
Top
1%
1922 63.3% 36.7%
1929 55.8% 44.2%
1933 66.7% 33.3%
1939 63.6% 36.4%
1945 70.2% 29.8%
1949 72.9% 27.1%
1953 68.8% 31.2%
1962 68.2% 31.8%
1965 65.6% 34.4%
1969 68.9% 31.1%
1972 70.9% 29.1%
1976 80.1% 19.9%
1979 79.5% 20.5%
1981 75.2% 24.8%
1983 69.1% 30.9%
1986 68.1% 31.9%
1989 64.3% 35.7%
1992 62.8% 37.2%
1995 61.5% 38.5%
1998 61.9% 38.1%
2001 66.6% 33.4%
2004 65.7% 34.3%
2007 65.4% 34.6%
2010 64.6% 35.4%
Wealth inequality in the United States increased from 1989 to 2013.[25]

### World distribution of wealth

Worlds regions by total wealth (in trillions USD), 2018

#### By region

Region Proportion of world (%)[21][26]
Population Net worth GDP
PPP Exchange rates PPP Exchange rates
North America 5.2 27.1 34.4 23.9 33.7
Central/South America 8.5 6.5 4.3 8.5 6.4
Europe 9.6 26.4 29.2 22.8 32.4
Africa 10.7 1.5 0.5 2.4 1.0
Middle East 9.9 5.1 3.1 5.7 4.1
Asia 52.2 29.4 25.6 31.1 24.1
Other 3.2 3.7 2.6 5.4 3.4
Totals (rounded) 100% 100% 100% 100% 100%

World distribution of financial wealth. In 2007, 147 companies controlled nearly 40 percent of the monetary value of all transnational corporations.[27]

## Wealth concentration

Wealth concentration is a process by which created wealth, under some conditions, can become concentrated by individuals or entities. Those who hold wealth have the means to invest in newly created sources and structures of wealth, or to otherwise leverage the accumulation of wealth, and are thus the beneficiaries of even greater wealth.

### Economic conditions

Global share of wealth by wealth group

The first necessary condition for the phenomenon of wealth concentration to occur is an unequal initial distribution of wealth. The distribution of wealth throughout the population is often closely approximated by a Pareto distribution, with tails which decay as a power-law in wealth. (See also: Distribution of wealth and Economic inequality). According to PolitiFact and others, the 400 wealthiest Americans had "more wealth than half of all Americans combined."[14][15][16][17] Inherited wealth may help explain why many Americans who have become rich may have had a "substantial head start".[18][19] In September 2012, according to the Institute for Policy Studies, "over 60 percent" of the Forbes richest 400 Americans "grew up in substantial privilege".[20]

The second condition is that a small initial inequality must, over time, widen into a larger inequality. This is an example of positive feedback in an economic system. A team from Jagiellonian University produced statistical model economies showing that wealth condensation can occur whether or not total wealth is growing (if it is not, this implies that the poor could become poorer).[28]

Joseph E. Fargione, Clarence Lehman and Stephen Polasky demonstrated in 2011 that chance alone, combined with the deterministic effects of compounding returns, can lead to unlimited concentration of wealth, such that the percentage of all wealth owned by a few entrepreneurs eventually approaches 100%.[29][30]

#### Correlation between being rich and earning more

Given an initial condition in which wealth is unevenly distributed (i.e., a "wealth gap"[31]), several non-exclusive economic mechanisms for wealth condensation have been proposed:

• A correlation between being rich and being given high paid employment (oligarchy).
• A marginal propensity to consume low enough that high incomes are correlated with people who have already made themselves rich (meritocracy).
• The ability of the rich to influence government disproportionately to their favor thereby increasing their wealth (plutocracy).[32]

In the first case, being wealthy gives one the opportunity to earn more through high paid employment (e.g., by going to elite schools). In the second case, having high paid employment gives one the opportunity to become rich (by saving your money). In the case of plutocracy, the wealthy exert power over the legislative process, which enables them to increase the wealth disparity.[33] An example of this is the high cost of political campaigning in some countries, in particular in the US (more generally, see also plutocratic finance).

Because these mechanisms are non-exclusive, it is possible for all three explanations to work together for a compounding effect, increasing wealth concentration even further. Obstacles to restoring wage growth might have more to do with the broader dysfunction of a dollar dominated system particular to the US than with the role of the extremely wealthy.[34]

Counterbalances to wealth concentration include certain forms of taxation, in particular wealth tax, inheritance tax and progressive taxation of income. However, concentrated wealth does not necessarily inhibit wage growth for ordinary workers.[35]

### Markets with social influence

Product recommendations and information about past purchases have been shown to influence consumers choices significantly whether it is for music, movie, book, technological, and other type of products. Social influence often induces a rich-get-richer phenomenon (Matthew effect) where popular products tend to become even more popular.[36]

## Redistribution of wealth and public policy

In many societies, attempts have been made, through property redistribution, taxation, or regulation, to redistribute wealth, sometimes in support of the upper class, and sometimes to diminish economic inequality.

Examples of this practice go back at least to the Roman republic in the third century B.C.,[37] when laws were passed limiting the amount of wealth or land that could be owned by any one family. Motivations for such limitations on wealth include the desire for equality of opportunity, a fear that great wealth leads to political corruption, to the belief that limiting wealth will gain the political favor of a voting bloc, or fear that extreme concentration of wealth results in rebellion.[38] Various forms of socialism attempt to diminish the unequal distribution of wealth and thus the conflicts and social problems arising from it.[39]

During the Age of Reason, Francis Bacon wrote "Above all things good policy is to be used so that the treasures and monies in a state be not gathered into a few hands… Money is like fertilizer, not good except it be spread."[40]

The rise of Communism as a political movement has partially been attributed to the distribution of wealth under capitalism in which a few lived in luxury while the masses lived in extreme poverty or deprivation. However, in the Critique of the Gotha Program, Marx and Engels criticized German Social Democrats for placing emphasis on issues of distribution instead of on production and ownership of productive property.[41] While the ideas of Marx have nominally influenced various states in the 20th century, the Marxist notions of socialism and communism remains elusive.[42][vague]

On the other hand, the combination of labor movements, technology, and social liberalism has diminished extreme poverty in the developed world today, though extremes of wealth and poverty continue in the Third World.[43]

In the Outlook on the Global Agenda 2014 from the World Economic Forum the widening income disparities come second as a worldwide risk.[44][45]

## References

1. ^ Davies, James B.; Sandström, Susanna; Shorrocks, Anthony F.; Wolff, Edward N. "Estimating the World Distribution of Household Wealth" (PDF). Institution/Country: University of Western Ontario, Canada; WIDER-UNU. Retrieved 2016-09-10.
2. ^ "Free exchange: The real wealth of nations". The Economist. 2012-06-30. Retrieved 2012-07-14.
3. ^ "Inclusive Wealth Report – IHDP". Ihdp.unu.edu. 2012-07-09. Archived from the original on 2012-06-30. Retrieved 2012-07-14.
4. ^ "Why it is hard to share the wealth". New Scientist. 2005-03-12. Retrieved 2012-03-26.
5. ^ "62 people own same as half world – Oxfam | Press releases | Oxfam GB". Oxfam.org.uk. 2016-01-18. Retrieved 2016-09-10.
6. ^ a b
7. ^ a b "Global Wealth Report 2013". credit-suisse.com. Archived from the original on 2015-02-14. Retrieved 2016-06-30.
8. ^ "The World Factbook – Central Intelligence Agency". Cia.gov. Archived from the original on July 16, 2017. Retrieved 2016-09-10.
9. ^ The World Distribution of Household Wealth. James B. Davies, Susanna Sandstrom, Anthony Shorrocks, and Edward N. Wolff. 5 December 2006.
10. ^ The rich really do own the world 5 December 2006
11. ^ Kromkowski, "Who owns Baltimore", CSE/HGFA, 2007.
12. ^
13. ^ a b Working Paper No. 589 Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze – an Update to 2007 by Edward N. Wolff, Levy Economics Institute of Bard College, March 2010
14. ^ a b Kertscher, Tom; Borowski, Greg (March 10, 2011). "The Truth-O-Meter Says: True – Michael Moore says 400 Americans have more wealth than half of all Americans combined". PolitiFact. Retrieved August 11, 2013.
15. ^ a b Moore, Michael (March 6, 2011). "America Is Not Broke". Huffington Post. Retrieved August 11, 2013.
16. ^ a b Moore, Michael (March 7, 2011). "The Forbes 400 vs. Everybody Else". michaelmoore.com. Archived from the original on 2011-03-09. Retrieved August 11, 2013.
17. ^ a b Pepitone, Julianne (September 22, 2010). "Forbes 400: The super-rich get richer". CNN. Retrieved August 11, 2013.
18. ^ a b Bruenig, Matt (March 24, 2014). "You call this a meritocracy? How rich inheritance is poisoning the American economy". Salon. Retrieved August 24, 2014.
19. ^ a b Staff (March 18, 2014). "Inequality – Inherited wealth". The Economist. Retrieved August 24, 2014.
20. ^ a b Pizzigati, Sam (September 24, 2012). "The 'Self-Made' Hallucination of America's Rich". Institute for Policy Studies. Retrieved August 24, 2014.
21. ^ a b c d Wealth, Income, and Power by G. William Domhoff of the UC-Santa Barbara Sociology Department
22. ^ a b Occupy Wall Street And The Rhetoric of Equality Forbes November 1, 2011 by Deborah L. Jacobs
23. ^ Norton, M. I., & Ariely, D., "Building a Better America – One Wealth Quintile at a Time", Perspectives on Psychological Science, January 2011 6: 9-12
24. ^ 1922–1989 data from Wolff (1996), 1992–2010 data from Wolff (2012)
25. ^ "Trends in Family Wealth, 1989 to 2013". Congressional Budget Office. August 18, 2016.
26. ^ Data for the following table obtained from UNU-WIDER World Distribution of Household Wealth Report (The University of California also hosts a copy of the report)
27. ^ Financial world dominated by a few deep pockets. By Rachel Ehrenberg. September 24, 2011; Vol.180 #7 (p. 13). Science News. Citation is in the right sidebar. Paper is here [1] with PDF here [2].
28. ^ Burdaa, Z.; et al. (January 22, 2001). "Wealth Condensation in Pareto Macro-Economies" (PDF). Physical Review E. 65 (2). arXiv:cond-mat/0101068. Bibcode:2002PhRvE..65b6102B. doi:10.1103/PhysRevE.65.026102. Retrieved September 11, 2013.
29. ^ Joseph E. Fargione et al.: Entrepreneurs, Chance, and the Deterministic Concentration of Wealth.
30. ^ Simulation of wealth concentration according to Fargione, Lehman and Polasky
31. ^ Rugaber, Christopher S.; Boak, Josh (January 27, 2014). "Wealth gap: A guide to what it is, why it matters". AP News. Retrieved January 27, 2014.
32. ^ Batra, Ravi (2007). The New Golden Age: The Coming Revolution against Political Corruption and Economic Chaos. Palgrave Macmillan. ISBN 1-4039-7579-5.
33. ^ Channer, Harold Hudson (25 July 2011). "TV interview with Dr. Ravi Batra". Retrieved 21 October 2011.
34. ^ Bessen, James (2015). Learning by Doing: The Real Connection between Innovation, Wages, and Wealth. Yale University Press. pp. 226–27. ISBN 978-0300195668. The obstacles to restoring wage growth might have more to do with the broader dysfunction of our dollar- dominated political system than with the particular role of the extremely wealthy.
35. ^ Bessen, James (2015). Learning by Doing: The Real Connection between Innovation, Wages, and Wealth. Yale University Press. p. 3. ISBN 978-0300195668. However, concentrated wealth does not necessarily inhibit wage growth.
36. ^ Altszyler, E; Berbeglia, F.; Berbeglia, G.; Van Hentenryck, P. (2017). "Transient dynamics in trial-offer markets with social influence: Trade-offs between appeal and quality". PLoS ONE. 12 (7): e0180040. Bibcode:2017PLoSO..1280040A. doi:10.1371/journal.pone.0180040. PMC 5528888.
37. ^ Livy, Rome and Italy: Books VI-X of the History of Rome from its Foundation, Penguin Classics, ISBN 0-14-044388-6
38. ^ "… A perceived sense of inequity is a common ingredient of rebellion in societies …", Amartya Sen, 1973
39. ^ "The Spirit Level" by Richard Wilkinson and Kate Pickett;Bloomsbury Press 2009
40. ^ Francis Bacon, Of Seditions and Troubles
41. ^ Critique of the Gotha Program, Karl Marx. Part I: "Quite apart from the analysis so far given, it was in general a mistake to make a fuss about so-called distribution and put the principal stress on it."
42. ^ Archie Brown, The Rise and Fall of Communism, Ecco, 2009, ISBN 978-0-06-113879-9
43. ^ Jeffrey D. Sachs, The End of Poverty, Penguin, 2006, ISBN 978-0-14-303658-6
44. ^ "Outlook on the Global Agenda 2014 – Reports". Reports.weforum.org. World Economic Forum. Retrieved 2016-09-10.
45. ^ "178 Oxfam Briefing Paoer" (PDF). Oxfam.org. 20 January 2014. Retrieved 2016-09-10.