Wealth Inequality

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Lorenz Curve

Figure 8.1 plots the Lorenz curves of net household wealth for the survey years 2013 and 2018. These curves are graphical representations of the relationship between the cumulative share of households (ranked according to the level of wealth from lowest to highest) and their cumulative share of total wealth.  A perfectly equal wealth distribution would be one in which each household has the same wealth, therefore ten percent of households would own ten percent of cumulative wealth, twenty percent of households would own twenty percent of wealth (and so on). This scenario is depicted in Figure 8.1 by the 45o line, the line of perfect equality. The further away a curve is from the line of perfect equality the more unequal the distribution. It is evident from the relative distances of the 2013 and 2018 Lorenz curves from the line of perfect equality that net wealth is more equally distributed in 2018 than it was in 2013.

Gini Coefficient

The Gini coefficient is a statistical measure of inequality. A Gini coefficient value of zero denotes perfect equality, indicating that wealth is distributed equally amongst all households. A Gini Coefficient of 1 would denote perfect inequality where all the wealth is held by one household. The Gini coefficient for net wealth in 2018 is 0.67, compared to 0.75 in 2013, indicating a reduction in wealth inequality over this five-year period.

Cumulative Households 0 1 Perfect Equality 2018 Net Household Wealth 2013 Net Household Wealth 0 -0.5 -0.8 1 -0.6 -1.6 2 -0.7 -2.2 3 -0.7 -2.6 4 -0.7 -2.8 5 -0.7 -3.1 6 -0.7 -3.2 7 -0.7 -3.4 8 -0.7 -3.4 9 -0.7 -3.5 10 -0.6 -3.5 11 -0.6 -3.5 12 -0.6 -3.5 13 -0.6 -3.5 14 -0.6 -3.5 15 -0.6 -3.5 16 -0.6 -3.5 17 -0.6 -3.5 18 -0.5 -3.5 19 -0.5 -3.5 20 -0.5 -3.5 21 -0.4 -3.5 22 -0.4 -3.5 23 -0.3 -3.4 24 -0.3 -3.4 25 -0.2 -3.4 26 -0.1 -3.4 27 0 -3.4 28 0.1 -3.3 29 0.3 -3.3 30 0.5 -3.2 31 0.6 -3.2 32 0.8 -3.1 33 1 -3 34 1.3 -2.9 35 1.5 -2.8 36 1.8 -2.7 37 2 -2.5 38 2.3 -2.4 39 2.6 -2.2 40 3 -2 41 3.3 -1.7 42 3.6 -1.4 43 4 -1.1 44 4.4 -0.8 45 4.8 -0.5 46 5.3 -0.1 47 5.7 0.3 48 6.2 0.7 49 6.6 1.2 50 7.1 1.6 51 7.7 2.1 52 8.2 2.6 53 8.8 3.1 54 9.4 3.7 55 10 4.3 56 10.6 4.9 57 11.2 5.5 58 11.9 6.1 59 12.6 6.8 60 13.3 7.5 61 14 8.2 62 14.8 9 63 15.5 9.8 64 16.3 10.6 65 17.1 11.4 66 18 12.2 67 18.8 13.1 68 19.7 14 69 20.7 14.9 70 21.6 15.9 71 22.5 16.9 72 23.6 18 73 24.7 19 74 25.8 20.2 75 26.9 21.4 76 28.1 22.6 77 29.3 23.9 78 30.6 25.3 79 31.8 26.6 80 33.5 28.1 81 34.9 29.6 82 36.3 31.1 83 37.9 32.8 84 39.6 34.5 85 41.3 36.4 86 43.2 38.4 87 45.2 40.5 88 47.2 42.6 89 49.4 45 90 51.8 47.5 91 54.1 50.3 92 57 53.3 93 59.9 56.6 94 63.2 60.2 95 67 64.5 96 71.4 69.2 97 76.9 74.9 98 82.2 81.2 99 91.6 91.4 100 100 100

Income and Wealth Inequality

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The Gini coefficient for gross household income is 0.44 in 2018 indicating that net wealth is distributed more unequally than gross household income, (see Figure 8.2).

The Survey on Income and Living Conditions is the official source of income inequality statistics, where income inequality measures are based on equivalised disposable income, rather than on gross household income, see link here.

% Cumulative Households 0 1 Perfect Equality 2018 Gross Household Income 2018 Net Household Wealth 0 0 -0.5 1 0.1 -0.6 2 0.2 -0.7 3 0.4 -0.7 4 0.6 -0.7 5 0.8 -0.7 6 1 -0.7 7 1.2 -0.7 8 1.4 -0.7 9 1.6 -0.7 10 1.9 -0.6 11 2.1 -0.6 12 2.3 -0.6 13 2.6 -0.6 14 2.8 -0.6 15 3.1 -0.6 16 3.4 -0.6 17 3.7 -0.6 18 4 -0.5 19 4.4 -0.5 20 4.7 -0.5 21 5.1 -0.4 22 5.4 -0.4 23 5.8 -0.3 24 6.2 -0.3 25 6.6 -0.2 26 7 -0.1 27 7.4 0 28 7.9 0.1 29 8.3 0.3 30 8.7 0.5 31 9.2 0.6 32 9.6 0.8 33 10.1 1 34 10.6 1.3 35 11.2 1.5 36 11.7 1.8 37 12.2 2 38 12.8 2.3 39 13.3 2.6 40 13.9 3 41 14.5 3.3 42 15.1 3.6 43 15.8 4 44 16.4 4.4 45 17.1 4.8 46 17.8 5.3 47 18.4 5.7 48 19.1 6.2 49 19.9 6.6 50 20.7 7.1 51 21.3 7.7 52 22.2 8.2 53 22.9 8.8 54 23.6 9.4 55 24.4 10 56 25.3 10.6 57 26.2 11.2 58 27.1 11.9 59 27.9 12.6 60 28.8 13.3 61 29.8 14 62 30.7 14.8 63 31.7 15.5 64 32.7 16.3 65 33.7 17.1 66 34.9 18 67 35.9 18.8 68 36.9 19.7 69 38.1 20.7 70 39.2 21.6 71 40.5 22.5 72 41.6 23.6 73 42.9 24.7 74 44.2 25.8 75 45.8 26.9 76 46.9 28.1 77 48.3 29.3 78 49.5 30.6 79 51.1 31.8 80 52.3 33.5 81 54 34.9 82 55.5 36.3 83 56.7 37.9 84 58.8 39.6 85 60.2 41.3 86 62 43.2 87 63.7 45.2 88 65.6 47.2 89 67.2 49.4 90 69.2 51.8 91 71.2 54.1 92 73.5 57 93 75.3 59.9 94 77.7 63.2 95 80 67 96 82.8 71.4 97 85.9 76.9 98 89.4 82.2 99 94.6 91.6 100 100 100

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