Distribution of Wealth

 

New York, New York

And find that I'm number one
Top of the list
Head of the heap
King of the hill

We’re Number One!

Actually the United States is Number 3 on  a ranking of the most skewed wealth among the counties in the World. However the first-place county, Brunei, and the second-place country, Bahamas, have only slightly more than 0.01% of the wealth of the United States. It is number one among countries that have at least 0.1% of the wealth of the United States.

The mean wealth is only the first moment of the wealth distribution of the population. The second moment of any distribution, including wealth, is the variance. (During the COVID pandemic the phrase “flatten the curve” became popular. A statistician would state this same concept as “increase the variance”). The third moment of a distribution is the skew. If the skew is zero, then the distribution is characterized as normal. It is only in this case that Donald Trump Junior was correct, increasing the mean will also increase the median. If the distribution is skewed, then this need not be true because THAT is how math works.

In order to know the skew it is necessary to know the Standard Deviation, the square root of the variance. Income or wealth can not be less than zero. (While you can be in debt, someone else owns that debt as an asset therefore you can’t report income or wealth below zero unless you similarly reduce that debt, or the income from that debt,  as an asset of someone else.). Even when the mean and median wealth, or income, is reported, the Standard Deviation is often not reported. Statistics states that 99.97% of a distribution will be within three Standard Deviations of the Mean. This is known as the scientific standard of 3 Sigma. If you know the Mean, and you know that three times the Standard Deviation from the Mean can not be less than zero, you can bound the Standard Deviation. Knowing the bound on the Standard Deviation it is possible to estimate the skew of the distribution.

Top 20 Counties Ranked by Skew of Wealth Distribution

Country	Mean (USD)	Median (USD)	Wealth (USD)	Pearson's Second Coefficient of Skew
Brunei	$39,098	$5,122	$12,081,282,000	7.82
Bahamas	$56,737	$7,507	$15,772,886,000	7.81
United States	$505,421	$79,274	$126,339,581,949,000	7.59
Bahrain	$87,559	$14,520	$115,402,762,000	7.51
United Arab Emirates	$115,476	$21,613	$929,928,228,000	7.31
Brazil	$18,272	$3,469	$2,801,225,504,000	7.29
Ukraine	$13,104	$2,529	$453,909,456,000	7.27
Russia	$27,162	$5,431	$3,037,933,890,000	7.20
Philippines	$15,290	$3,155	$1,023,818,400,000	7.16
Lesotho	$1,226	$264	$1,523,918,000	7.14
Switzerland	$673,962	$146,733	$4,689,427,596,000	7.04
Laos	$7,379	$1,610	$31,641,152,000	7.04
Yemen	$5,581	$1,223	$85,283,261,000	7.03
Kuwait	$129,890	$28,698	$408,633,940,000	7.01
South Africa	$20,308	$4,523	$763,377,720,000	7.00
India	$14,252	$3,194	$12,833,113,636,000	6.98
Zambia	$3,068	$692	$25,559,508,000	6.97
Saudi Arabia	$68,697	$15,495	$1,661,505,642,000	6.97
Nigeria	$6,451	$1,474	$618,850,881,000	6.94
Botswana	$15,598	$3,680	$21,182,084,000	6.88

 Source: Credit Suisse Wealth Databook.

Not only is the United States the wealthiest county on Earth, but it also has one of the, if not the, most skewed distributions of that wealth.

If anyone is interested, the listed country with the least skewed distribution of wealth is Iceland, where virtually everyone is related.  It would make for some very awkward family reunions if you became wealthier at the expense of a family member.