Make Christmas Matter

From the Practice of Leadership blog, by George Ambler ...

"Leadership, Character

A study on The World Distribution of Household Wealth by the World Institute for Development Economics Research of the United Nations University (UNU-WIDER) was released on the 5th of December 2006. For the purposes of the research wealth was defined as:

“We use the term in its long-established sense of net worth: the value of physical and financial assets less debts. In this respect, wealth represents the ownership of capital. Although capital is only one part of personal resources, it is widely believed to have a disproportionate impact on household well-being and economic success, and more broadly on economic development
and growth.”

The research highlights include:

• The richest 2% of adults in the world own more than half of global household wealth.
• 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. In contrast, the bottom half of the world adult population owned barely 1% of global wealth.
• The research finds that assets of $2,200 per adult placed a household in the top half of the world wealth distribution in the year 2000. To be among the richest 10% of adults in the world required $61,000 in assets, and more than $500,000 was needed to belong to the richest 1%, a group which - with 37 million members worldwide - is far from an exclusive club.
• Wealth is heavily concentrated in North America, Europe, and high income Asia-Pacific countries. People in these countries collectively hold almost 90% of total world wealth.
• The study finds wealth to be more unequally distributed than income across countries. High income countries tend to have a bigger share of world wealth than of world GDP. The reverse is true of middle- and low-income nations. However, there are exceptions to this rule, for example the Nordic region and transition countries like the Czech Republic and Poland.
• A small number of countries account for most of the wealthiest 10% in the world. One quarter are Americans and another 20% are Japanese. ‘The USA and Japan stand out because they have large populations and high average wealth.'

Another interesting aspect of the research for me was exploration of the “super rich“, the number of US$ based millionaires and billionaires in the world. The research found that the “relationship in the range from $250,000 to $5 million appears stable and remarkably well approximated by a Pareto distribution….. Fitting a Pareto distribution in this range and extrapolating to the highest echelons of the wealth distribution, yielded the following predictions for the number of high wealth holders and the super rich.”

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