Who's Counting: Health, Wealth and Happiness

Dec. 31, 2006 — -- The New Year invites consideration of basics such as health, wealth, and happiness. A few new studies shed a little quantitative light on these perennial imponderables, some of it surprising.

First wealth. A recently released study says that the inequality in wealth throughout the world is extreme and growing more so. The report by the World Institute for Development Economics Research of the United Nations University paints an informative picture of the world's wealth distribution as of 2000, the last year for which figures are available. It states that the top 1% of the world's population - about 37 million adults - had net assets (note: not income) worth at least $500,000. This constituted approximately 40% of the world's assets.

In contrast, the top 50% of the world's people owned a bit less than 99% of the wealth, and this translated into a median wealth (half the world's population having more, half less) of just over $2,000. To be in the top 10% required net assets worth about $60,000.

Professor of mathematics at Temple University, John Allen Paulos is the author of best-selling books including "Innumeracy" and "A Mathematician Plays the Stock Market." His "Who's Counting?" column on ABCNews.com appears the first weekend of every month.

The richer nations led by the US have amassed an increasing share of the world's assets, with Americans, about 5% of the global population, owning about 33% of its assets. China and India are two of the few exceptions to the failure of developing nations to slowly catch up.

Within countries this asset inequality, described by so-called mathematical power laws, is generally as lopsided as it is globally, particularly in the US. Furthermore, asset inequality is even more extreme than income inequality.

Several caveats are mentioned by the study's authors, Anthony Shorrocks, James Davies, Susanna Sandström, and Edward Wolff. One is that it is extremely difficult to estimate wealth, especially in countries with bad or non-existent statistical services. A second is that the picture is not quite as unbalanced when comparisons are made using domestic purchasing power; how long does someone have to work to buy groceries or iPods? A third observation is that someone with a huge income might have a negative net worth and thus be adjudged very poor if ownership of assets is the measure being used.