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Wealth distribution


The distribution of wealth is a comparison of the wealth of various members or groups in a society. It differs from the income distribution in that it looks at the distribution of ownership of the assets in a society, rather than the current income of members of that society. The distribution of wealth shows economic inequality as per the Gini index.

Wealth in the context of this article is defined as a person's net worth, expressed as:

The word wealth is often confused with income. These two terms describe different but related things. Wealth consists of those items of economic value that an individual owns, while income is an inflow of items of economic value. (See .) The relation between wealth, income, and expenses is:

The distribution of income is substantially different from the distribution of wealth. According to the International Association for Research in Income and Wealth, "the world distribution of wealth is much more unequal than that of income."

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 United Nations definition of inclusive wealth is a monetary measure which includes the sum of natural, human and physical assets.

The vast and growing gap between rich and poor has been laid bare. The gap between the rich and poor can be illustrated by the fact that the three wealthiest individuals in the world have assets that exceed those of the poorest 10 percent of the world's population. The net worth of the world's billionaires increased from less than $1 trillion in 2000 to over $7 trillion in 2015 so the gap is growing up dramatically. Statistics shows 28.4 million slaves at the end of 2006 was living in the world with zero wealth. The right hand-side fig shows millionaires as 1 percent of the world population who possess more than half of global wealth.

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 fortune through a combination of talent, hard work or simply being in the right place at the right time. The wealth pyramid below was prepared by Credit Suisse in 2013; it captures these differences in striking detail. 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 10,000 USD. A further one billion(adult population) fall within the 10,000 – 100,000 USD range. While the average wealth holding is modest in the base and middle segments of the pyramid, their total wealth amounts to USD 40 trillion, underlining the potential for novel consumer products and innovative financial services targeted at this often neglected segment.


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