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In this paper, we review the existing empirical evidence on how individuals respond to the incentives created by a net wealth tax. Variation in the overall magnitude of behavioural responses is substantial: estimates of the elasticity of taxable wealth vary by a factor of 800. We explore three key reasons for this variation: tax design, context and methodology. We then discuss what is known about the importance of individual margins of response and how these interact with policy choices. Finally, we use our analysis to systematically narrow down and reconcile the range of elasticity estimates. We argue that a well-designed wealth tax would reduce the tax base by 7–17 per cent if levied at a tax rate of 1 per cent.

Purpose To examine the activities, concerns, and expectations of critical care nurses and professional critical care nursing organizations worldwide. Design A descriptive survey methodology was used. This study is the fifth worldwide quadrennial review of its type to monitor variations in critical care nursing needs and provide robust evidence to inform policy related to critical care nursing practice. Methods The fifth World Federation of Critical Care Nurses international survey of critical care nursing organizations was emailed to potential participants from countries with critical care nursing organizations or known critical care nurse leaders. Data were collected online. Responses were entered into SPSS version 23 software (IBM Corp., Armonk, NY, USA) and analyzed by geographical region and national wealth group. Findings Eighty-two national representative respondents participated in the survey, of whom two thirds (n = 56, 68%) had an established critical care nursing organization in their country. The five most important issues identified were working conditions, teamwork, staffing levels, the need for formal practice guidelines and competencies, and wages. The top five critical care nursing organization services that were considered to be of most importance were professional representation, as well as provision of workshops and education forums, national conferences, practice standards and guidelines, and local conferences. The most important contributions expected from the World Federation of Critical Care Nurses were standards for clinical practice and professional practice, international conferences, professional representation, and study and education grants. Conclusions The results highlight priority areas for critical care nursing and reinforce the need to address factors that can inform critical care nursing policy and practice. Results of this survey should be incorporated into strategic action plans at the national and international levels. Clinical Relevance Nursing leaders, policymakers, and other interested stakeholders should consider these findings when planning critical care workforce requirements. Interested parties should work collaboratively to inform recommendations for further policy and action.

Despite the notable successes of lesbian, gay, bisexual, transgender and intersex (LGBTI) activism in the region, individual European countries have varied considerably in the extent and speed with which they have adopted legislation to recognise the rights of their LGBTI citizens. Scholars have often turned to modernisation theory to explain these variable outcomes and argue that high levels of national wealth are an important factor in the success of LGBTI movements. Although the correlation between modernity, economic development and tolerance of LGBTI lifestyles is often treated as a truism in the literature, scholars have paid less attention to the precise mechanisms by which the complex processes associated with modernisation facilitate policy change. Drawing on the classic works of both modernisation theory and gay and lesbian history, we examine a less explored route by which modernisation leads to the expansion of LGBTI rights. Specifically, we posit that urbanisation facilitates the adoption of rights policies by strengthening LGBTI movements and enhancing their political effectiveness. To test this proposition, we use event history analysis and an original dataset that contains measures for institutional, cultural, economic and movement variables, as well as measures of urbanisation in 44 European countries between 1980 and 2015. Our findings support the contention that urbanisation has a strong effect on the formation of LGBTI movement organisations as well as the speed with which European states adopt both same‐sex union and anti‐discrimination legislation. The relationship between urbanisation and rights expansion persists even after controlling for a country's level of wealth, religious adherence and the influence of European institutions and norms.

Since the Keynesian Revolution of the 1930s, many prominent economists have argued that a useful policy response to economic depression is to boost government spending But pressure to spend quickly increases the potential for waste and inefficiency: this is ignored or dismissed in the Keynesian literature For example, a widely cited cost?benefit analysis of stimulus spending does not even acknowledge the possibility of waste, and some Keynesians go so far as to argue that wasteful spending during a crisis can nonetheless be desirable Here we extend the typical analysis by accounting explicitly for the leading sources of cost including waste, resource costs, and the excess burden of taxation Our results suggest that stimulus spending that is largely wasteful is unlikely to generate net wealth A proper response to economic depression must consider the possibility that government waste can render stimulus spending counterproductive

Significant limitations and rapid declines in financial capacity are a hallmark of patients with early-stage Alzheimer's disease (AD). We use linked Health and Retirement Study and Medicare claims data spanning 1992-2014 to examine the effect of early-stage AD, from the start of first symptoms to diagnosis, on household financial outcomes. We estimate household fixed-effects models and examine continuous measures of liquid assets and net wealth, as well as dichotomous indicators for a large change in either outcome. We find robust evidence that early-stage AD places households at significant risk for large adverse changes in liquid assets. Further, we find some, but more limited, evidence that early-stage AD reduces net wealth. Our findings are consequential because financial vulnerability during the disease's early-stage impacts the ability of afflicted individuals and their families to pay for care in the disease's later stage. Additionally, the findings speak to the value that earlier diagnosis may provide by helping avert adverse financial outcomes that occur before the disease is currently diagnosable with available tools. These results also point to a potentially important role for financial institutions in helping reduce exposure of vulnerable elderly to poor outcomes.

Australia is a world leader in household uptake of solar photovoltaic systems. In this paper, we use household-level data to identify economic, social, and environmental factors that influence actual uptake and the intention to install. We find that higher net wealth is generally associated with higher likelihood to install. Households that have mortgages, that spend more on electricity, and that pay higher average electricity prices are more likely to intend to install. Environmental preferences and related behaviours, property tenure, and space constraints are associated with both actual uptake and intention to install. We use data from the Survey of Income and Housing of 2015-16 and the Household Energy Consumption Survey of 2012.

This paper derives the determination of external finance premium (EFP) in the context of banking sector profit maximisation behaviour. EFP/credit spread stems from the managerial cost, associated with the intermediation process, of factor payments to collateral and labour services. The stake of entrepreneurs is relevant to determine the EFP on two grounds: (a) the ratio of entrepreneurial net wealth to collateral value influences the total managerial cost; and (b) entrepreneurs' net worth (fraction of total collateral) helps mitigate the EFP from extracting rebate from collateral service. Based on these, we can derive an observationally similar relationship between EFP and entrepreneurial leverage, as in previous studies. This provides a rationale for us to understand the financial friction from a novel perspective. Besides the leverage ratio, the EFP is shown to be determined also by the resource cost of financial intermediation, for which the model generates a mechanism that contains broader ingredients in determining the behaviour of EFP.

This article examines the composition of Britain’s `millionaire’ population during the late 1920s – early 1930s, based on data for living millionaires (in contrast to previous studies, which have focused on wealth at death). Using tabulated data compiled by the Inland Revenue for all persons on incomes over £50,000 per annum, it explores the factor incomes of Britain’s millionaire population and their main sources of income, by sector. It then analyses a unique individual-level data set of British millionaires, compiled by the Inland Revenue for the 1928/9 tax year, to show their sectoral and geographical composition. Most millionaires are shown to be `businesspeople’ rather than rentiers, while landed millionaires represented only a small proportion of the total. Businesspeople millionaires are shown to be disproportionately active in a relatively narrow range of sectors, the common characteristic of which was the potential to generate abnormal profits, mainly through cartelisation or amalgamation. Thus, rather than revealing the sectors most important to national wealth, or competitive advantage, the clustering of millionaires primarily reflects rising barriers to competition in inter-war Britain and the abnormal profits they generated.

The persistent racial wealth gap in the United States continues to grow, reaching an all‐time high in 2016. Throughout much of the discussion and analysis on the racial wealth gap, however, the assumption that higher education can at least narrow the gap has often been left unquestioned. While education is a factor in increasing incomes and wealth, recent research challenges the narrative that education is the key to reducing the racial wealth gap. Our findings provide further support for this growing literature. While black college graduates do have higher wealth than those without college degrees, the wealth gap with white college graduates remains vast, and the inheritances received by white college‐educated households provide a huge boost to wealth that is not available to their black counterparts. Further, we find that black college‐educated households are much more likely to provide financial support for their parents as well as their children, and that black households that do provide support across generations do so with much less net wealth than white households that do not.

Financial illiteracy is widespread amongst the elderly. Financially illiterate people are more likely to experience asset loss and outlive their savings after retirement. This paper measures financial literacy of elderly Australians using Item Responses Theory. Using a Lasso regression, we find that younger, married males with higher income and greater net wealth are more likely to be financially literate. Better financial literacy is also associated with good health, higher educational attainment, better occupation and outright home ownership. Our findings suggest policy‐makers take action and we make informed and practicable policy recommendations.

This paper estimates the level and distribution of household wealth globally, as well as for regions and countries, for the period 2000–2014. The data used are mainly from household surveys and national accounts balance sheets, covering about two thirds of the world's population and over 95% of global household wealth. Lists of the most wealthy published in the media are used to adjust the upper tail. Wealth levels and distributions are imputed for countries without data. Estimated global household wealth stood at USD 251 trillion in 2014, having grown from USD 117 trillion in the year 2000. Wealth per adult in 2014 was USD 53,000. The estimated Gini coefficient of global wealth was 92.2% in 2014 and the share of the top 10% was 88.3%. Wealth inequality fell from 2000 to 2007, with the share of the top 10% falling from 89.4% to 86.5%, before rising steadily to 2014. From 2000 to 2008 the share of financial assets in gross wealth, an important driver of wealth inequality, fell from 55.2% to 50.2%, before climbing to 55.0% in 2014. Household debt rose from 13.6% of gross assets in 2000 to 16.0% in 2008, and has since fallen to 13.9%.

This paper analyses the effects of monetary policy on inequality over the business cycle via its impacts on returns on assets, the cost of debt servicing, and asset prices in selected advanced economies. Monetary policy easing has a priori ambiguous effects on income and net wealth inequality via financial channels. Effects depend in a complex way on the relative size and distributions of assets, liabilities, and income. In practice, these effects are estimated to be small. A house price increase generally reduces net wealth inequality, while the opposite is true for increases in stock and bond prices. As monetary policy has the potential to affect inequality, monetary authorities face communication challenges. The available research on interactions between monetary policy and inequality does not justify targeting inequality by central banks.

Introduction and Aims. This study estimates cross-country variation in socioeconomic disparities in adolescent alcohol use and identifies country-level characteristics associated with these disparities. Design and Methods. The association between socioeconomic status (family wealth and parental education) and alcohol use (lifetime use and episodic heavy drinking) of 15- to 16-year-olds from 32 European countries was investigated. Country-level characteristics were national income, income inequality and per capita alcohol consumption. Multilevel modelling was applied. Results. Across countries, lifetime use was lower in wealthy than in less wealthy families (odds ratio [OR](girls) = 0.95, OR(boys) = 0.94). The risk of episodic heavy drinking, in contrast, was higher for children from wealthier families (OR(girls) = 1.04, OR(boys) = 1.08) and lower when parents were highly educated (ORs = 0.95–0.98). Socioeconomic disparities varied substantially between countries. National wealth and income inequality were associated with cross-country variation of disparities in lifetime use in few comparisons, such that among girls, the (negative) effect of family wealth was greatest in countries with unequally distributed income (OR = 0.86). Among boys, the (negative) effect of family wealth was greatest in low-income countries (OR = 1.00), and the (positive) effect of mothers' education was greatest in countries with high income inequality (OR = 1.11). Discussion and Conclusions. Socioeconomic disparities in adolescent alcohol use vary across European countries. Broad country-level indicators can explain this variation only to a limited extent, but results point towards slightly greater socioeconomic disparities in drinking in countries of low national income and countries with a high income inequality. [Gomes de Matos E, Kraus L, Hannemann T-V, Soellner R, Piontek D. Cross-cultural variation in the association between family's socioeconomic status and adolescent alcohol use. Drug Alcohol Rev 2017;00:000-000]

This article studies how health and wealth investments react to the presence of random returns, distinguishing the case where only the level of health investment is chosen from the case where both health and wealth investments are chosen. We show that this reaction depends mainly on certain features of preferences: cross‐prudence/imprudence in wealth, cross‐prudence/imprudence in health, and the value of the indexes of relative prudence in wealth and in health being larger or smaller than the threshold of 2. We also show the role of Edgeworth–Pareto substitutability/complementarity between wealth and health investments in determining optimal choices.

Objectives This study examines the contribution of general human capital, social capital, and financial management practices to the individual's relative financial well†being following bankruptcy. Methods Multivariate logistic regression models were estimated using secondary data from the Survey of Consumer Finances 2004 and 2007. Results Individuals who possess higher general human capital and greater access to social capital are significantly more likely to achieve net worth parity with nonfilers following bankruptcy compared to similar individuals with lower levels of general human capital and social capital. Conclusion Human and social capital are relatively more important factors contributing to attaining net worth parity with peers following bankruptcy than financial management practices and attitudes when controlling for ownership of protected assets. Congressionally mandated financial management training and counseling would likely have substantially better outcomes on bankruptcy filers’ financial well†being over the long term if additional human†capital†building—and consequently income†building—programs are integrated into the mandated financial management training.

This paper provides estimates of the effects of the fall in financial and housing wealth in 2008–09 on overall macroeconomic activity. When the wealth losses are run through a structural macroeconometric model, it is estimated that the fall in wealth contributed about 2.1 percentage points to the rise in the unemployment rate in 2009 and about 3.3 points in 2010. The contribution to the fall in real GDP was 4.5% and 5.4% in the 2 years. These estimates account for most—but not all—of the recessionary increase in unemployment. The remaining increase in unemployment may have resulted more directly from financial stresses, but little evidence is found for this in this study.

There is considerable cross-country variation in levels of household wealth and in wealth inequality. This paper assesses the extent to which these differences can be accounted for by differences in the distributions of households' demographic and economic characteristics. A counterfactual decomposition analysis of micro data from five countries (Italy, U.K., U.S., Sweden and Finland) is used to identify the effects of characteristics on component wealth holdings, their value and their distribution. The findings of the paper suggest that the biggest share of cross-country differences is not attributable to the distribution of household demographic and economic characteristics but rather reflect strong unexplained country effects.

This article shows that the increase of income inequality and global wealth concentration was an important driver for the financial and Eurozone crisis. The high levels of income inequality resulted in balance of payment imbalances and growing debt levels. Rising wealth concentration contributed to the crisis because the increasing asset demand from the rich played a key role in the growth of the structured credit market and enabled poor and middle-income households to accumulate increasing amounts of debt. This analysis is the first that puts both income and wealth inequality to the epicentre of the recent crisis, and is crucial for social scientists researching on not just the effects but also the causes of the crisis related to inequality. Our findings strongly suggest that the policy response to the crisis must not be limited to financial regulation but should involve policies to address inequality by increasing the bargaining power of labour as well as redistributive tax policies.

Macroeconomic downturns can have an important impact on the receipt of informal and formal long-term care, since recessions increase the number of unemployed and affect net wealth. This paper investigates how the market for informal care changed during and after the Great Recession in Europe, with particular focus on their various determinants. We use data from the Survey of Health, Aging and Retirement in Europe, which includes a rich set of variables covering waves before and after the Great Recession. We find evidence of an increase in the availability of informal care after the economic downturn when controlling for year and country fixed effects. This trend is mainly driven by changes in care provision of individuals not cohabiting with the care recipient. We also find evidence of several determinants of informal care receipt changing during the crisis such as physical needs, personal wealth and household structures.

Drawing on the author's work, this lecture presents evidence on U.S. income and wealth inequality. It presents series for top income and wealth shares, and the distribution of economic growth by income groups. It discusses the mechanisms behind the evolution of U.S. income and wealth inequality from historical and comparative perspectives. It analyzes the role of public policy and in particular taxation in the evolution of inequality. (JEL D31, F66, J24)

Can the rise of wealth–income ratios observed in rich economies be found in the case of Greece as well? This paper uses a generalization of a two-good wealth accumulation equation to estimate the evolution of the national wealth–income ratio, and finds that, similarly to the European evidence, the ratio rises from about 280 percent in the 1970s to about 500 percent on the eve of the current financial crisis. On average, during 1974–96, the saving-induced wealth growth cancels out the capital losses, whereas in the subsequent decade, 1997–2007, the balance changes considerably when the saving effect vanishes and the prolonged capital gains result in a rising wealth–income ratio. During the recession, income falls faster than wealth. The results remain robust to several alterations of the benchmark framework.

This paper projects China's national savings through 2040 based on China's national account data, demographic data, and data on rural and urban life-cycle income and consumption. Our baseline projections show that China's national saving in 2040 will be 16 times the current national saving. The annual growth rate of wealth will decline from 16.3 percent in 2012 to 9.5 percent in 2040. Lowering the growth rate of wealth accumulation to the current rate of return to wealth increases consumption through 2040; lowering the growth rate of wealth further may increase consumption more in the short run, but less in the long run.

South African household savings rates have been declining steadily over the last five decades, raising concerns that the population structurally under-saves. Against the background of new saving-enhancing policy initiatives, this paper asks to what extent the concern is founded, and whether the measurement of saving is really appropriate to guide economic policy. Comparing different macroeconomic concepts and measurements of saving, we show that the measure of saving in the national accounts (the residual between income and expenditure) understates the household savings rate compared to other measures. Specifically, an alternative measure from the balance sheets (the change in wealth) yields a significantly higher and non-declining figure. While households have not been “putting aside” their incomes, they have nevertheless grown richer, driven largely by the appreciation of asset valuations. We also examine the impact of taking non-financial saving and wealth into account, and conclude that household sector saving on the aggregate is significantly higher than the national accounts suggest. However, these adjusted measures are most relevant for the upper tail of the income and wealth distribution, raising important distributional concerns.

Gross domestic product (GDP) and household income measures provide invaluable metrics of economic activity in an economy, but they tell us little about the sustainability of the economic trends. National wealth accounting can be utilised to determine the size of the underlying productive base, which provides insight into the sustainability of economic activities and indicates the potential for intergenerational well-being. An empirical methodology was developed to measure wealth and then used to analyse multiple Asian countries. A common theme found across the Asian countries was the depletion of natural capital (forests, minerals and energy) and the development of human and produced capital. A strong correlation between growth in GDP per capita and wealth per capita was also found, but there are instances of GDP growth and wealth growth having different signs.

This paper adapts a matching and bargaining model due to Rubinstein and Wolinsky (1985) to analyze the connection between wealth inequality and economic power, understood as the ability to command a positive share of the net gains from given production relations. The analysis indicates that the translation of superior wealth in productive assets into economic power depends on an inverse relationship between wealth and bargaining costs at the level of individual transactions when significant exchange frictions exist and persistent capital scarcity at the level of market equilibrium as exchange frictions become small. Different interpretations of this scarcity condition are discussed.

We use comparable data from the US and England to examine similarities and differences in the level and trajectories of assets among households aged 70 and over. We find that in the US assets on average decline gradually with age, while in England older households actually accumulate wealth. These differences appear to be driven largely, though not entirely, by housing wealth: over the period we consider house price growth drove increases in housing wealth in England that more than offset the slow draw down of non-housing wealth. This suggests the illiquid nature of housing is likely to be an important factor in explaining wealth drawdown at older ages. We also consider the potential importance of bequest motives and savings to insure against the risk of medical and long-term care expenses.

A substantial share of the wealth of Americans is held in tax-deferred form such as in retirement accounts or as unrealised capital gains. Most data and statistics on assets and wealth are reported on a pre-tax basis, but pre-tax values include an implicit tax liability and may not provide as accurate a measure of the financial position or material well-being of families. In this paper, we describe the distribution of tax-deferred assets in the Survey of Consumer Finances (SCF) from 1989 to 2013, provide new estimates of the income tax liabilities implicit in those assets, and present new statistics on the level and distribution of after-tax net worth. The results of our analysis suggest that, relative to published statistics on pre-tax net worth, the distribution of after-tax wealth is slightly less concentrated in the early years of our sample period, but the effectiveness of the income tax system in reducing wealth inequality has decreased during the last decade. We find the reduction in the long-term capital gains rate is the primary reason for the muted effectiveness of the current income tax system in reducing wealth inequality.

We investigate the impact of inheritances and gifts received on the distribution of wealth. Whereas previous work has looked only at marketable wealth, we consider broader measures of wealth including state and private pensions. We find that once pension wealth is included, inheritances and gifts no longer have an equalising impact on the distribution of wealth. Without pension wealth, including wealth transfers reduces the Gini coefficient for wealth from 0.57 to 0.52. With pension wealth, the impact is negligible. We argue that this latter effect gives a better indication of the impact of inheritances on the distribution of lifetime income.

Recent decades have seen substantial demutualization of financial institutions around the world, involving the conversion of accumulated communally owned wealth into private wealth. Whether driven by a quest for a more efficient organizational structure or by wealth expropriation incentives, different methods of demutualization have different implications for wealth allocation among current members and transfers of wealth to outsiders. While credit union sectors internationally have, to date, experienced few demutualizations, there are increasing incentives for such organizational change. Three alternative demutualization strategies (share issue to members plus an external capital raising, liquidation and cash distribution to members (a quasi-demutualization), and merger with a listed company) recently used by Australian credit unions are analysed to highlight wealth implications, survival risks for the mutual form and potential problems arising in the demutualization process.

If outstanding debt is risky, issuing equity transfers wealth from equity holders to debt holders. If existing leverage is high and bankruptcy costs are small, this wealth transfer effect outweighs the gains to stockholders from optimizing firm value. Empirically, we find that for investment-grade firms, higher leverage implies a greater likelihood of issuing equity, as expected in a standard tradeoff model. However, consistent with the impact of wealth transfer effects, for junk-grade firms, higher leverage implies a greater likelihood of issuing debt. The analysis implies an additional route through which historical shocks determine firms’ financing choices.

Is wider access to stockholding opportunities related to reduced wealth inequality, given that it creates challenges for small and less sophisticated investors? Counterfactual analysis is used to study the influence of changes in the U.S. stockholder pool and economic environment, on the distribution of stock and net household wealth during a period of dramatic increase in stock market participation. We uncover substantial shifts in stockholder pool composition, favoring smaller holdings during the 1990s upswing but larger holdings around the burst of the Internet bubble. We find no evidence that widening access to stocks was associated with reduced net wealth inequality.

Using a unique combination of regulatory and survey microdata, we examine the importance of the life cycle theory of consumption in estimating housing wealth effects for the Irish mortgage market. Since the recent financial crisis, this market has experienced substantial house price declines and negative equity. Thus, house price expectations are likely to be important in influencing housing wealth effects. We find a positive correlation between consumption and changes in housing wealth among our sample of mortgaged Irish households. Furthermore, we find that this positive association only exists when housing wealth changes are perceived to be of a permanent nature.

From an economic perspective, imposing a credibly one-off net wealth levy in times of crisis as a tool to ward off a national emergency appears to be advantageous as, in an ideal world, this would not distort market players’ allocation decisions. However, in practice, charging such a levy may give rise to distortions and unwanted effects on the real economy. Credibility that the levy will be imposed as a once-only measure is key to ensuring that harmful distortions in the allocation of resources are kept to a minimum. This paper confirms this using an analysis based on a dynamic stochastic general equilibrium (DSGE) model. In practice, while a government cannot guarantee that such a measure will be taken once only, it can contribute to the credibility of this in a number of ways. First, the country's future ‘business model’ must become apparent; second, there has to be a basic level of confidence in the government and a firm belief that the budgetary imbalances were not actively caused by the state – at least not by the government currently in power; third, a verifiable outlook of sustainable public finances must be in place; and fourth, the political costs of a repeat levy must be high. This paper also discusses the potential impact of alternative model set-ups as well as some practical implementation problems.

Due to the influence of traditional culture, housing is regarded as a status good and plays an important role in improving male competitiveness in the marriage market in China. Using data from a recent household survey, we find that urban families with a son are more likely to own a house, with a larger size, and at an earlier date. With the booming of the Chinese housing market since the late 1990s as background, having a son thus generates a substantial effect on family wealth through the channel of house ownership. Using the gender of the first-born child as an instrument, our estimation shows that families with a son have 188 thousand RMB yuan higher housing wealth on average.

Using unique Taiwanese initial public offering (IPO) features, we examine whether the underwriters control the issue method choice (the expected revenue collection hypothesis) or whether the issuers make the choice in the best interests of the pre-IPO shareholders (the expected net wealth gain hypothesis). We find that the choice of issue method is consistent with maximizing pre-IPO shareholders' expected net wealth gains. The findings also suggest that most IPO issuers do not choose auctions. Though we offer insights into why IPO auctions have been declining, we note that this evidence cannot completely explain the total disappearance of auctions in many countries.

The effect of wealth on consumption is an issue of long-standing interest to economists. Analysts believe that fluctuations in household wealth have driven major swings in economic activity. This essay considers the so-called “wealth effects”—the impact of changes in wealth on household consumption and the overall macroeconomy. There is an extensive existing literature on wealth effects, but there are also many unanswered issues and questions. This essay reviews the important issues regarding the role wealth plays in the macroeconomy and argues that there is a need for much more wealth effect research as well as better data sources for conducting such analysis. Keywords: housing wealth; financial wealth; wealth effects; consumption; borrowing constraints; saving; household debt; deleveraging

We explore the positive relationship between house prices and household spending by following a panel of Australian households. No evidence for ‘traditional housing wealth effects' is found, with young homeowners exhibiting the largest wealth effects. Young renters also exhibit a positive consumption response to house prices, although less so than young homeowners. This suggests that increasing house prices raise spending via easing credit constraints and a common association between house prices and a third factor. Results from a cohort-level panel are similar to those using household-level data, suggesting that ‘pseudo-panels' may be used as a partial substitute for actual panels.

Combining data from surveys, inheritance tax records, and rich lists, we estimate top wealth shares for Australia from World War I until the present day. We find that the top 1 percent share declined by two-thirds from 1915 until the late 1960s, and rose from the late 1970s to 2010. The recent increase is sharpest at the top of the distribution, with the top 0.001 percent wealth share tripling from 1984 to 2012. The trend in top wealth shares is similar to that in Australian top income shares (though the drop in the first half of the twentieth century is larger for wealth than income shares). Since the early twentieth century, top wealth shares in Australia have been lower than in the U.K. and U.S.

Innovation contests allow firms to harness specialized skills and services from globally dispersed participants for solutions to business problems. Such contests provide a rich setting for operations management (OM) scholars to explore problem solving in global labor markets as firms continue to unbundle their innovation value chains. In this study, we examine the implications of specific types of diversity in innovation contests on problem-solving effort and success. First, we conceptualize diversity among contestants in terms of national wealth (measured as gross domestic product per capita (GDPP) adjusted for purchasing power parity) and national culture (measured using the culture dimensions of performance orientation and uncertainty avoidance) and examine how such factors influence problem-solving effort. Next, we examine how differences between contestants and contest holders in terms of the above factors influence contest outcomes. Using data from a popular online innovation contest platform and country-level archival data, we find that contestants from countries with lower levels of GDPP are more likely to exert greater problem-solving effort compared to other contestants. With regard to national culture, we find that performance orientation and uncertainty avoidance have positive and negative effects, respectively, each of which weakens with increasing levels of GDPP. Finally, our analysis provides evidence of homophily effects indicating that contestants who share greater similarities with the contest holder in terms of national wealth and national culture are more likely to be successful in a contest. We discuss the implications of the study's findings for contest holders and platform owners who organize innovation contests, and for emerging research on innovation contests.

Aims To examine the role of national wealth in the association between family affluence and adolescent weekly smoking, early smoking behaviour and weekly smoking among former experimenters. Design and Participants Data were used from the Health Behaviour in School-aged Children (HBSC) study conducted in 2005/2006 in 35 countries from Europe and North America that comprises 60 490 students aged 15 years. Multi-level logistic regression was conducted using Markov chain Monte Carlo methods (MCMC) to explore whether associations between family affluence and smoking outcomes were dependent upon national wealth. Measurement Family Affluence Scale (FAS) as an indicator for the socio-economic position of students. Current weekly smoking behaviour is defined as at least weekly smoking (dichotomous). Early smoking behaviour is measured by smoking more than a first puff before age 13 years (dichotomous). Weekly smoking among former experimenters is restricted to those who had tried a first puff in the past. Findings The logistic multi-level models indicated an association of family affluence with current weekly smoking [odds ratio (OR) = 1.088; 95% credible interval (CrI) = 1.055–1.121, P

Over the past two decades, a number of countries have experienced appreciation in house prices at the same time that aggregate consumption has increased. This paper tests alternative hypotheses for this phenomenon by using repeated household surveys from Australia and Canada to identify the transmission mechanism that links consumption and household wealth. The empirical analysis suggests that neither a direct wealth effect nor a common causal factor likely accounts for the observed correlation between wealth and consumption in these two countries. Rather, indirect factors such as collateral effects arising from relaxation of credit constraints are a more likely explanation.

The effect of wealth on consumption is an issue of long‐standing interest to economists. Conventional wisdom suggests that fluctuations in household wealth have driven major swings in economic activity both in the United States and abroad. This paper considers the so‐called consumption wealth effects. There is an extensive existing literature on wealth effects that has yielded some insights. For example, research has documented the relationship between aggregate household wealth and aggregate consumption over time, and a large number of household‐level studies suggest that wealth effects are larger for households facing credit constraints. However, there are also many unresolved issues regarding the influence of household wealth on consumption. We review the most important of these issues and argue that there is a need for much more research in these areas as well as better data sources for conducting such analysis.

The last three decades saw a sharp decline in traditional defined benefit (DB) pensions and a corresponding rise in defined contribution (DC) plans. Using the Survey of Consumer Finances from 1983 to 2010, I find that after robust gains in the 1980s and 1990s, pension wealth experienced a marked slowdown in growth from 2001 to 2007 and then fell in absolute terms from 2007 to 2010. Median augmented wealth (the sum of net worth, pensions, and Social Security wealth) advanced slower than median net worth from 1983 to 2007 and its inequality rose more, as DB wealth fell off. However, from 2007 to 2010, the opposite occurred. While median wealth plummeted by 41 percent and inequality spiked by 0.032 Gini points, median augmented wealth fell by only 21 percent and its Gini coefficient rose by only 0.009 points. The differences are due to the moderating influence of Social Security wealth.

The idea of higher wealth taxes to finance the mounting public debt in the wake of the financial crisis is gaining ground in several OECD countries. We evaluate the revenue and distributional effects of a one-time capital levy on personal net wealth that is currently on the political agenda in Germany. We use survey data from the German Socio-Economic Panel (SOEP) and estimate the net wealth distribution at the very top, based on publiclyavailable information about very rich Germans. Since net wealth is strongly concentrated, the capital levy could raise substantial revenue, even if relatively high personal allowances are granted. We also analyse the compliance and administrative costs of the capital levy.

This paper uses recent data on historical oil wealth to provide new evidence on the effect of oil wealth on democracy in Africa from 1955 to 2008. We find that oil wealth is statistically associated with a lower likelihood of democratization when we estimate the relationship in a pooled cross-sectional and time-series setting. In addition, when estimated using fixed effects and IV-2SLS methods, the strong negative statistical association continues to hold. Indeed, this result is robust to the source of oil wealth data, the choice and treatment of the variables set, and the sample selection. Our results also show other interesting and important results. The cross-country evidence examined in the study confirms that the ‘Lipset/Aristotle/modernization hypothesis’ (that prosperity stimulates democracy) is a strong empirical regularity. Also, the propensity for democracy rises with population size, population density, ethnic fractionalization, having British legal origin or colonial heritage, and having a supportive institutional environment in the form of maintenance of the rule of law. However, apart from oil wealth, democracy tends to fall with linguistic fractionalization and rough (mountainous) terrain. Moreover, consistent with the data, North Africa consistently fails to favor democratic development.