Friday 2 July 2021

Credit Suisse wealth inequality data

Bob Gregory's latest rant against the evils of neoliberals inspired me to pull together the latest Credit Suisse wealth figures. The social democracies in Europe usually turn up as a lot more unequal in wealth than NZ, and I was curious where the latest numbers might put things. 

The latest iteration has NZ with the 145th most unequal wealth distribution of the 168 countries in the data set, or the 24th most equal. I've highlighted NZ in red and Sweden, Germany, Finland and Denmark in Green (from left to right). NZ is way over on the right, just to the right of France which you can't really see. 

NZ has more traditionally been toward the middle of the pack. The 2017 data had us 80th most unequal of 171, and a bit more unequal than France. This time we're a bit less unequal than France. 

Recall that Gini measures the area between the Lorenz Curve and the line of perfect equality. So a Gini of 0 means we're on the line of perfect equality. It's a measure of all against all; other inequality measures measure different things. 

In this case, I'd bet that sharp housing price increases are driving increases in wealth portfolios for middle-wealth households for whom house is the primary asset, and that the equalising effect of that is currently dominating the effect on households who don't own any house. 

So it'll come down again in due course if housing gets corrected, and presumably at that point the inequality-shouters will shout about the rise in measured inequality back to where it was a few years ago. 

Note that this is a PDF to Excel conversion by SmallPDF which looks to have done just a superb job of things - but there could be OCR errors that I hadn't caught. 

It probably highlights one of the problems in just using Gini. The more important growing inequality is between insiders and outsiders in housing markets, but Gini has wealth as having become more equal. 

I have come to expect Oxfam NZ reports shouting about the latest Credit Suisse figures, taking whatever they can from them to provide reason to worry about inequality and give them money. This year's Credit Suisse report was delayed. I wonder whether Oxfam will have noticed that NZ's wealth distribution became far more equal. 

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