Distribution of Wealth

Distribution of wealth and income refers to the way in which the wealth and income of a nation are divided among its population. It also refers to the way in which the wealth and income of the world are divided among nations. Patterns of wealth and income distribution are studied by various statistical means and wealth is an accumulated store of possessions. Wealth is often given a monetary value if prices can be determined for each of the possessions. It is a very well known fact that income is a net total of the flow of payments received in a specific time period.

Some world countries seek statistics on wealth from legally required evaluations of the estates of deceased persons. In many world countries, annual tax statements that measure income provide more or less reliable information. Classification basis should be determined to classify patterns of national wealth as well as income. One classification system categorizes wealth on the basis of labour, land, capital and entrepreneurship. It has been pointed out that personal distribution statistics categorize wealth on a per capita basis.

The Effect of Inheritance on Earned Incomes

Gross national income per capita showcases a measure of annual national income per person in different countries. Developed world countries have a much higher gross national income than less developed countries. According to World Bank statistics, the per capita gross national income was approximately $10000 for almost all developed countries in the early twenty first century. There is huge variation among industries, regions, rural and urban areas, females and males in a high income country like the United States of America. A huge chunk of the US population has a middle income derived from earnings and wages vary depending on occupation.

A major portion of an economy’s higher income is often derived from investments than earnings. The ability of individuals to retain their fortunes and pass them on to descendants lead to the existence of a class of uber rich people. Inheritance affects earned incomes and access to well paid jobs and social status is largely the byproduct of education. Well educated children of rich parents retain their parent’s status and earning power. A dynamic economy like that of USA is helpful in increasing the likelihood of attaining wealth and status through individual effort alone.

Estimation of Wealth Distribution Using Household Wealth

The richest 10% of adults in the world own 85% of global household wealth and the average person in the top 10% owns 3000 times the wealth of the average person in the bottom 10%. The distribution of wealth in global countries is estimated using a comprehensive concept of household wealth. Wealth can be defined as the value of all household resources, both human and non human. It represents the ownership of capital in larger perspective and wealth has disproportionate impact on household wellbeing, economic success, economic development and economic growth. Household wealth is concentrated, both in size distribution and geographically, globally. Global household wealth in the year 2000 was estimated to be $125 trillion and mean wealth in USA was $144000. New Zealand, United Kingdom and Denmark belong to the list of high-income countries.