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Where the Wealth Is: The Geographic Distribution of Wealth in the United States

Working Paper Number FY2016-129
Rebecca Chenevert, Alfred Gottschalck, Mark Klee, and Xingyou Zhang

Introduction

Household net worth, or wealth, is known to exhibit a highly skewed distribution. Estimates of wealth concentration show that the top 0.1 percent of families held 22 percent of the wealth owned by U.S. households in 2012. However, household wealth is a difficult concept to measure. In order to create reliable estimates of net worth for small demographic groups or for subnational geographies, we need a data source that is large enough to allow reliable subgroup analysis and that is comprehensive enough to allow a direct construction of net worth. At present, no such data source exists in the United States.

New research being undertaken at the U.S. Census Bureau combines information from the Survey of Income and Program Participation (SIPP) and the American Community Survey (ACS) to create wealth estimates for smaller geographies and populations than were previously available. The SIPP is nationally representative and has rich and detailed information on wealth, while the ACS has more limited information on wealth but has a very rich sample with a diversity of geographic areas represented. We estimate a model of household net worth on SIPP data and use the resulting estimates to predict net worth for ACS households. This paper presents preliminary estimates of wealth and inequality at sub-national levels from the ACS, and seeks to validate and improve the estimation.

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