Wealth Inequality: A Hybrid Approach toward Multidimensional Distributional National Accounts in Europe

This article proposes a practically feasible framework for compiling Multidimensional Distributional National Accounts (MDINA) serving two functions: a comprehensive measure of (components of) net worth and their distribution, and a link to macroeconomic statistics. I break down twelve components of marketable wealth by wealth and income groups, and three functions of wealth for Austria, Finland, France, Germany and Spain. MDINA complemented by summary indicators reveal large heterogeneity in the degree of inequality, and shed light on differences in the structure of wealth portfolios across and within countries. I combine data collected in the largely harmonized HFCS survey and adjust for remaining differences in survey modes regarding the treatment of the top tail using (Generalized) Pareto models estimated from rich lists or top wealth shares derived from tax data and leaked information on wealth held in offshore tax havens. Measured inequality increases strongest in countries where surveys refrain from appropriate top-tail corrections.