Income capitalization with heterogeneous rates of return
The DEMS Economics Seminar series is proud to host
Alberto Vesperoni
(King's College, London)
Abstract: In many countries, the income distribution is well-understood from tax data while the wealth distribution is unknown and typically proxied by surveys. This paper develops a method to estimate the unknown wealth distribution from the observed income distribution. Our approach is an extension of the income-capitalization method that, using the same data input, delivers a richer estimation by introducing heterogeneity in household-specific capacities to generate returns. Employing Norwegian administrative data, we demonstrate the improved accuracy of our method in a context where the estimated wealth distribution can be compared with its empirical counterpart.
The seminar will be in presence, Room: 4057 - Building U7