Wealth Definitions

Researchers disagree about the appropriate definition of wealth (see, e.g., Levy and Michel 1991:41–42; Wolff 1987a, 1993, 1994). Some suggest that consumer durables such as automobiles and household appliances should not be considered wealth because they are not fungible (i.e., easily turned into cash) and because their resale value understates their value to the owner (Wolff 1993:37). Similarly, Wolff (1993:37) suggested that retirement assets such as social security assets should not be considered wealth because they are not marketable. Empirical evidence also suggests that including pensions as wealth significantly alters the distribution of wealth among families (McDermed, Clark, and Allen 1989). In my simulated estimates, I included the value of vehicles that are one of the only assets many families own and for which market values are readily available, but I excluded other consumer durables. I also included the value of IRA and Keogh accounts (both of which are fungible) but excluded other pension assets and social security. I included these wealth types in order to be consistent with other published estimates of wealth ownership and distribution.

Validation of Survey and Simulated Estimates

Throughout this volume, particularly in the early chapters, I included both survey estimates and simulated estimates at least partially in order to validate the simulated estimates. In Tables A–1, A–2, and A–3, I present additional comparisons on my survey estimates and simulation results with actual survey estimates published elsewhere.