Distribution of wealth

The distribution of wealth is a comparison of the wealth of various members or groups in a society. It shows one aspect of economic inequality or economic heterogeneity.Distribution of net worth in the United States (2007). The net wealth of many people in the lowest 20% is negative because of debt.world distribution of wealth by country (PPP)world distribution of wealth by region (PPP)world distribution of wealth by country (exchange rates)world distribution of wealth by region (exchange rates) The distribution of wealth is a comparison of the wealth of various members or groups in a society. It shows one aspect of economic inequality or economic heterogeneity. The distribution of wealth differs from the income distribution in that it looks at the economic distribution of ownership of the assets in a society, rather than the current income of members of that society. According to the International Association for Research in Income and Wealth, 'the world distribution of wealth is much more unequal than that of income.' For one set of rankings regarding wealth, see list of countries by wealth per adult. Wealth of an individual is defined as net worth, exposed as: wealth = assets − liabilities A broader definition of wealth, which is rarely used in the measurement of wealth inequality, also includes human capital. For example, the United Nations definition of inclusive wealth is a monetary measure which includes the sum of natural, human and physical assets. The relation between wealth, income, and expenses is: :change of wealth = saving = income − consumption(expenses). If an individual has a large income but also large expenses, the net effect of that income on her or his wealth could be small or even negative.The term wealth should not be confused with rich. These two terms describe different but related things. Wealth consists of those items of economic value that an individual owns, while rich is an inflow of items of economic value. (See Stock and flow.) Wealth concentration is a process by which created wealth, under some conditions, can become concentrated by individuals or entities. Those who hold wealth have the means to invest in newly created sources and structures of wealth, or to otherwise leverage the accumulation of wealth, and are thus the beneficiaries of even greater wealth. There are many ways in which the distribution of wealth can be analyzed. One common-used example is to compare the amount of the wealth of individual at say 99 percentile relative to the wealth of the median (or 50th) percentile. This is P99/P50, which is one of the potential Kuznets ratios. Another common measure is the ratio of total amount of wealth in the hand of top say 1% of the wealth distribution over the total wealth in the economy. In many societies, the richest ten percent control more than half of the total wealth. Pareto Distribution has often been used to mathematically quantify the distribution of wealth at the right tail (the wealth of very rich). In fact, the tail of wealth distribution, similar to the one of income distribution, behave like Pareto distribution but with ticker tail.