CH AP TE R 4: Va lu ing Wealth Using Pu r ch as ing Pow e r Pa r ities
TABLE 4.1 Data Sources for Estimating Wealth in Purchasing Power Parities Indicator
Data source
Notes
Total wealth
CWON 2021
Estimated in constant 2018 US dollars at market exchange rates
Actual individual consumptionlevel PPPs
ICP 2017, OECD, Eurostat
GDP-level PPPs
World Bank’s WDI
Market exchange rates
ICP 2017, OECD, WDI
Consumer price index
WDI, IMF’s macroeconomic and financial data
GDP deflator
WDI
Used when AIC-level PPPs are not available
Used when CPI data are not available
Source: World Bank. Note: AIC = actual individual consumption; CPI = consumer price index; CWON = Changing Wealth of Nations; GDP = gross domestic product; ICP = International Comparison Program; IMF = International Monetary Fund; OECD = Organisation for Economic Co-operation and Development; PPP = purchasing power parity; WDI = World Development Indicators.
implemented to maximize country coverage to make a meaningful comparison between the MER-based wealth as published in CWON 20211 and the PPP-based figures. The data sources used are listed in table 4.1. The following sections focus on the comparison of the wealth accounts based on PPPs to MERs.
Shift in the Global Distribution of Wealth The PPP-based wealth results show a clear and expected shift in the global distribution of wealth in 2018. When wealth is measured using PPPs, the share of global wealth for low-income and lower-middle-income countries increases from 7.3 to 15.8 percent (figure 4.1). Upper-middle-income and high-income non-OECD countries increase their share of global PPPbased wealth by a smaller margin. The global share of wealth for OECD countries decreases from 58.7 to 42.1 percent. Inequality across income groups is still apparent, as the vast majority of the global population (84 percent) resides in low- and middle-income countries and yet holds a much smaller portion of the world’s wealth—39 percent in MER-based wealth and 55 percent in PPP-based wealth. Figure 4.2 shows the shifting distribution of global wealth by geographic region. South Asia’s share of PPP-based global wealth is 2.3 times higher than in MER in 2018, the highest increase across regions. SubSaharan Africa follows, almost doubling its share of PPP-based global wealth. But even with their share increases in PPP-based wealth, South Asia and Sub-Saharan Africa combined still hold only 11 percent of global wealth while containing almost 40 percent of the global population. Only
85
