If your saying the distribution of net worth is skewed, well that may be, I usually assume wealth measures to have a leptokurtosis distribution, but there certainly could be some amount of skew.
If you are implying the distribution (skewness) has shifted since 1952, that would require further analysis using cross-section data. Something I may do down the road. However, I wouldn’t expect to see much of a shift (once all the confounding factors are accounted for), although I think that if a shift exists it would be correlated with the preponderance of speculative activity. I have a report on that somewhere – I’ll dig it up.
Two possible confounding factors:
1: As total wealth increases, the amount of income that is expected to be earned increases and the more of this income would be expected to be brought into the present through the creation of debt.
2: In the market for debt, two innovations of the last 30 years have greatly reduced the risk and costs of default: information technology and the derivative market. Information technology, obviously, has allowed for greater identification of risky agents while also greatly reducing the cost of developing and disseminating this information. The derivative market has allowed risk to be hedged and it also illustrates the missing market problem, i.e. that whether an exchange occurs is usually dependent upon the existence (or possibility) of another set of exchanges (markets tend to throw off indirect benefits in excess of the benefits accruing to its participants).
Thus, a skewness shift between 1952 and today could simply reflect the fact that we have more complete markets, better information, and higher total lifetime income (wealth) expectations. |
