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Posts tagged with: "WFRBLN09027"

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Who holds what wealth?

More from the Survey of Consumer Finances

A week ago, we reported on the evolution of wealth for different classes of households, divided by wealth quantiles: top 1%, next 9%, next 40%, and bottom 50%. This time we look at what their wealth consists of—again, leveraging the Federal Reserve Board’s Survey of Consumer Finances. The first graph shows the distribution of total assets across the four groups. As mentioned in the earlier post, the first three groups have a similar share of assets, despite having vastly different population sizes, with the bottom 50% having much less.

The second graph shows the same distribution, but this time restricted to real estate assets. Now it looks quite different, with the top 1% holding significantly less (as a share) while the bottom 50% are doing better.

The third graph shows that this is even more pronounced with consumer durables (cars and household appliances, for example). As with real estate, everybody needs some, and there is only so much that the richest can buy.

So where are the assets of the richest coming from? The next graph shows that they own a much larger proportion of financial assets, with the bottom half of the population owning almost none.

The picture is even more dramatic with non-corporate assets (mostly private ownership of non-public enterprises), where the top 1% own over 50%. You can explore more data from the release table, but the general picture is clear: The least wealthy mostly hold assets that are essential in some ways: housing and consumer durables. The wealthiest hold assets through financial vehicles or stakes in businesses.

How these graphs were created: The procedure is the same for each graph. Start from the Levels of Wealth by Wealth Percentile Groups release table, check the series you want, and click “Add to Graph.” From the Edit Graph” menu, open the “Format” tab to choose graph type “Area” with stacking “Percent.”

Suggested by Christian Zimmermann.

View on FRED, series used in this post: WFRBLB50081, WFRBLB50083, WFRBLB50084, WFRBLB50085, WFRBLB50098, WFRBLN09027, WFRBLN09029, WFRBLN09030, WFRBLN09031, WFRBLN09044, WFRBLN40054, WFRBLN40056, WFRBLN40057, WFRBLN40058, WFRBLN40071, WFRBLT01000, WFRBLT01002, WFRBLT01003, WFRBLT01004, WFRBLT01017

Comparing the assets of the rich, poor, and middle class

Data on the asset distribution across U.S. households

The FRED Blog has covered income and wealth before: for example, distribution of wage income, net worth, and assets. This post covers household assets, but compares them across groups: the top 1%, the 90-99%, the 50-90%, and the bottom 50%. FRED has data from the Board of Governors of the Federal Reserve System’s Survey of Consumer Finances, and the graph above shows the total assets for households in these four wealth/asset groups.

It’s clear from the graph above that the bottom half of households collectively hold significantly fewer assets than any of the three other groups. Those groups hold about the same order of magnitude in assets, but with populations of very different sizes (40%, 9%, and 1% of the total number of households).

We also see that, for these three groups, total assets have grown almost continuously, except for a dip in the past recession. Of course, this could be due simply to inflation and population growth…

So, the second graph does this adjustment. It shows that total assets have increased over time for all three groups, even after this rescaling.

The third graph offers a further adjustment by dividing each line by the size of the group. This gives us an idea of the relative magnitude of the assets per capita in each group. The differences are so large that we removed the legends to make more space for the graph. The poorest group is so low, it’s not visible. So we might as well express the assets of the three top groups as a multiple of the assets of the poorest 50%, which we do in the last graph. Beyond the stark differences between the groups, it’s quite obvious that the assets of the top 1% have increased faster than those of the other two groups since the past recession. In fact, they have almost doubled relative to the poorest 50%, from 139 times to 258 times at the apex in 2017:Q1, to 235 times now.

How these graphs were created: Start with the release table for Levels of Wealth by Wealth Percentile Groups, select the four first series, click “Add to Graph.” That’s the first graph. For the second, use the first and go to the “Edit Graph” panel. For each line, in the “Edit Line…” tab, use the “customize data” tool to search for and add the CPI series and then the population series, and apply formula a/b/c. Repeat for the three other lines. For the third graph, modify the formula to divide each by 0.01, 0.09, 0.4, and 0.5, respectively. From the “Format” tab, deselect legends and axis labels to free up some space. For the last graph, for the first three lines, add series “WFRBLB50081” and add /(d/.5) to the formula. Remove the fourth line by deleting each of its constituting series.

Suggested by Christian Zimmermann.

View on FRED, series used in this post: B230RC0Q173SBEA, CPIAUCSL, WFRBLB50081, WFRBLN09027, WFRBLN40054, WFRBLT01000


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