Differences in the Measurement of Wealth, Wealth Inequality and Wealth Composition Obtained from Alternative U.S. Wealth Surveys.

Since household wealth surveys have been widely used to study saving and other issues, it is important to examine the reliability of the various survey estimates of wealth. In this paper, the authors assess the quality characteristics of the National Longitudinal Survey of Mature Men and the Retirement History Survey, as compared to the 1983 Survey of Consumer Finances. They find that the NLS and especially the RHS underreport wealth and wealth concentration. The underestimates of wealth held in the form of common stock, business equity, and investment real estate equity are substantial. The principal problem lies in underrepresentation of both tails of the wealth and income distributions, with the consequences of underrepresenting the upper tail being especially serious for wealth measurement. Several potential reasons for the underrepresentation are examined. Copyright 1991 by The International Association for Research in Income and Wealth.