Post by Sapphire Capital on Sept 5, 2008 3:56:08 GMT 4
Capital Gains and Wealth Distribution in Italy
Luigi Cannari
Bank of Italy
Romina Gambacorta
Bank of Italy
Giovanni D'Alessio
Bank of Italy
June 16, 2008
Bank of Italy Research Paper No. A10
Abstract:
This paper analyses the impact of capital gains on the level and distribution of wealth held by Italian households between 1989 and 2005. The evaluation of these issues is achieved using both macro and micro data in order to obtain a more robust result. The estimation of capital gains through macro data is obtained using national accounts data while micro data from the Bank of Italy's Survey of Household Income and Wealth are used to reconstruct capital gains accounting for price variations in the single assets composing wealth and for households' idiosyncratic characteristics. Capital gains, defined as in the national accounts, explain about 40 per cent of the growth in real per capita wealth observed over the whole period, and about one-third of the growth in wealth concentration. Using capital gains reconstruction we estimate that households' inter-temporal mobility between wealth classes is significantly affected by capital gains, to which 20 per cent of the observed transitions can be ascribed. Furthermore, capital gains take second place among the determinants of wealth variations at the household level, behind savings but ahead of intergenerational transfers.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1182603_code606534.pdf?abstractid=1182603&mirid=1
Luigi Cannari
Bank of Italy
Romina Gambacorta
Bank of Italy
Giovanni D'Alessio
Bank of Italy
June 16, 2008
Bank of Italy Research Paper No. A10
Abstract:
This paper analyses the impact of capital gains on the level and distribution of wealth held by Italian households between 1989 and 2005. The evaluation of these issues is achieved using both macro and micro data in order to obtain a more robust result. The estimation of capital gains through macro data is obtained using national accounts data while micro data from the Bank of Italy's Survey of Household Income and Wealth are used to reconstruct capital gains accounting for price variations in the single assets composing wealth and for households' idiosyncratic characteristics. Capital gains, defined as in the national accounts, explain about 40 per cent of the growth in real per capita wealth observed over the whole period, and about one-third of the growth in wealth concentration. Using capital gains reconstruction we estimate that households' inter-temporal mobility between wealth classes is significantly affected by capital gains, to which 20 per cent of the observed transitions can be ascribed. Furthermore, capital gains take second place among the determinants of wealth variations at the household level, behind savings but ahead of intergenerational transfers.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1182603_code606534.pdf?abstractid=1182603&mirid=1