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A study of UK household wealth through empirical analysis and a non-linear Kesten process.

ABSTRACT: We study the wealth distribution of UK households through a detailed analysis of data from wealth surveys and rich lists, and propose a non-linear Kesten process to model the dynamics of household wealth. The main features of our model are that we focus on wealth growth and disregard exchange, and that the rate of return on wealth is increasing with wealth. The linear case with wealth-independent return rate has been well studied, leading to a log-normal wealth distribution in the long time limit which is essentially independent of initial conditions. We find through theoretical analysis and simulations that the non-linearity in our model leads to more realistic power-law tails, and can explain an apparent two-tailed structure in the empirical wealth distribution of the UK and other countries. Other realistic features of our model include an increase in inequality over time, and a stronger dependence on initial conditions compared to linear models.

SUBMITTER: Forbes S

PROVIDER: S-EPMC9401122 | biostudies-literature | 2022

REPOSITORIES: biostudies-literature

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A study of UK household wealth through empirical analysis and a non-linear Kesten process.

Forbes Samuel S Grosskinsky Stefan S

PloS one 20220824 8

We study the wealth distribution of UK households through a detailed analysis of data from wealth surveys and rich lists, and propose a non-linear Kesten process to model the dynamics of household wealth. The main features of our model are that we focus on wealth growth and disregard exchange, and that the rate of return on wealth is increasing with wealth. The linear case with wealth-independent return rate has been well studied, leading to a log-normal wealth distribution in the long time limi ...[more]

PMID: 36001580

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Project description:Overcrowding has been regarded as indicating material deprivation and treated as a proxy measure for individual socioeconomic status. Conventionally, 'persons per room' (PPR) has been employed to identify overcrowded households in UK survey data, though the 'bedroom standard' (BS) approach or the 'modified bedroom standard' (MBS) approach has been thought to capture overcrowded households better. Little is known about which overcrowding measure will perform well in regard to construct and face validity. In this work, associations between three overcrowding measures and socioeconomic (income and household tenure status) and health (satisfied with health and GHQ12) indicators were assessed, using the UK Household Longitudinal Study Wave 6 data. PPR, BS and MBS were derived using relevant housing grid information and housing information from the dataset, which were aggregated at a household level (N = 18,848). Raw scores were categorised into 'under occupied (rooms < people)', 'balanced (rooms = people)', 'overcrowded (rooms < people)' according to an established cut-off point for each overcrowding measure. Kappa coefficient was used to assess the level of agreement between overcrowding measures. Construct validity of the measures were tested against log-transformed household equivalised income and housing tenure status as well as with each component of overcrowding measures. Using individual data (N = 38,455), face validity of the overcrowding measures was tested against satisfaction with health and mental health indicated by GHQ12. Each overcrowding measure has a fair agreement with the others (kappa = 0.44, p<0.001). All overcrowding measures were significantly correlated with income and household tenure in a similar manner. However, components of overcrowding measures were associated differently to these socioeconomic indicators, while they were better correlated with satisfaction with health compared to GHQ12, showing a complex aspect of overcrowding measures. In sum, use of PPR as a socioeconomic indicator is reasonable. However, given the complexity of the mechanism of health inequalities, the relevant household information is required to understand the link.

Dataset Information

A study of UK household wealth through empirical analysis and a non-linear Kesten process.

Publications

A study of UK household wealth through empirical analysis and a non-linear Kesten process.

Similar Datasets

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