The distribution of wealth is the study of how financial prosperity spreads among a population. Marketable assets, financial holdings, and net worth are used to calculate wealth. Wealth is concentrated in a small portion of society, and countries aim to bring equality through government regulation and social movements.
The distribution of wealth is the study of how financial prosperity spreads among the population of a particular country. This calculation shows which portions of the general population are concentrated. Wealth is generally evaluated in terms of marketable assets or financial holdings. Both are usually counted based on individual households or families in the population.
Marketable assets are the total assets of an individual or family, which may include real estate, financial investments, and monetary savings. Existing debt is subtracted from this sum to generate real wealth. This measure is the most preferred by economists when considering the distribution of wealth.
Income is not included in the calculation of marketable assets when determining the distribution of wealth. This is defined as any money earned by the family in the form of wages, dividends on financial investments, and rent received from owned property. Families that own a large amount of property may not have an equally high income. Personal property is not guaranteed to produce residual income. In general, however, high incomes are concentrated in those areas of society that also possess large amounts of wealth.
Financial wealth is defined as a family’s net worth minus the monetary value of their home. This measure is calculated when considering the distribution of wealth based on the theory that personal real estate is not readily liquid. Homes generally take a long time to sell compared to the immediate availability of cash. In general, the distribution of a country’s wealth is calculated in both terms, such as tradable assets and financial wealth, to obtain two different statistics.
When wealth distributions of countries around the world are compared, they generally demonstrate a consistent trend. They illustrate that, regardless of location, a relatively small number of society generally owns the majority of the wealth in a nation. In the United States, for example, when wealth is considered in terms of marketable assets, statistics show that the top 20% of wealthy families also own more than 80% of total calculated wealth. This means that the remaining 80% of the population owns less than 20% of the country’s wealth.
Many countries seek to bring equality to the distribution of wealth so that there is less disparity between the rich portion of the population and the poor. This can be attempted through a variety of means, such as government regulation and social movements. Countries that have a high volume of money moving through their economies often have a more equal level of wealth distribution than countries with a smaller volume of money.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
