Wealth Concentration — Economic Framework

Economic Framework

A balance sheet distinguishes gross assets from liabilities and net wealth. A home worth 100 with a mortgage of 70 contributes net wealth of 30. If its value rises to 120 while the mortgage stays fixed, the net position becomes 50 without additional wage income. The asset may still be illiquid and unable to meet an immediate payment.

A top share divides the wealth held by a defined group by total measured wealth. Holdings of 40 out of 100 give 40 per cent. If both rise proportionately to 50 and 125, the share remains 40 per cent. If holdings stay at 40 while total wealth falls to 80, the share rises to 50 per cent. Concentration can change through the denominator as well as the numerator.

The World Inequality Lab's 2024 paper estimates a top one per cent wealth share of 40.1 per cent for 2022–23. Its separate income-share estimate is 22.6 per cent. These are constructed research estimates using several sources, not a single official survey result. Survey undercoverage and rich-list limitations require attention.

Wealth can change through saving, asset returns, revaluation, inheritance and liabilities. A top share does not identify which mechanism caused a change. Negative net wealth can also complicate distribution measures, so conventions developed for non-negative income should not be transferred mechanically.