Rich Pickings? Risk, Return, and Skill in Household Wealth
2020
This paper empirically investigates the portfolios of wealthy households and their implications for the dynamics of inequality. Using an administrative panel of all Swedish residents, we document that returns on financial wealth are on average 4% higher per year for households in the top 1% compared to the median household. These high average returns are primarily compensations for high levels of systematic risk. Abnormal risk-adjusted returns, linked for instance to informational advantages or exceptional investment skill, contribute only marginally to the high returns of the wealthy. Implications for inequality dynamics and public policy are discussed.
Keywords:
- Correction
- Source
- Cite
- Save
- Machine Reading By IdeaReader
25
References
25
Citations
NaN
KQI