The Distribution of Wealth in America, 1983-2013
Wealth is one of the most important measures of economic well-being, but also one of the most difficult to measure. Transactions for some types of wealth, such as stocks and bonds, occur very frequently at prices which are readily available, and provide a current valuation; transactions for other types, such as owner-occupied homes, occur much less frequently and the value of the home is not easily measured in between transactions. In addition, shares of stock in a specific corporation are identical; the sale of any 100 shares establishes the value of all shares. By contrast, homes can differ widely; the sale of one three-bedroom, two-bath home does not establish the market value of all such homes even in an area as small as a city block. Research on wealth has been limited by these and other differences, despite extensive and serious efforts by numerous economists and other analysts.
In 1983 the Federal Reserve board began to sponsor a survey of household wealth, the Survey of Consumer Finances. The SCF has been conducted every three years since then. The 2013 survey is the most recently completed; the 2016 survey is underway at present and will become available late in 2017. The SCF contains the most detailed information available about the wealth of American households. It consists of detailed interviews with several thousand households. Some are chosen randomly from the population, while others are selected because they are expected to be households with high wealth. Each household is asked several hundred questions about its assets and its debts, and also about its demographic and other economic attributes. The typical interview last about 90 minutes, but some are substantially more than three hours.
Much of the research on wealth has focused on its distribution – the extent to which wealth ownership is concentrated among a small number of households, and whether it is becoming more or less concentrated over time. This has been true since the first SCF in 1983, and indeed before then using other data. The distribution of wealth in the United States is more concentrated than the distribution of income, as reported in the Current Population Survey conducted yearly by the U.S. Bureau of the Census. Also, the distribution of income has become increasingly more unequal since about 1969. It is natural to expect a similar change for wealth, but that need not necessarily occur.
This study uses the surveys since 1983 to analyze the changes in the distribution of wealth. There are some differences between the 1983 survey and the surveys from 1989 to 2013, so some of the analysis is based on the shorter period.