Global Wealth 2014: Riding a Wave of Growth

Global Wealth 2014: Riding a Wave of Growth

          
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Global Wealth 2014: Riding a Wave of Growth

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  • Methodology

    BCG has developed a proprietary methodology, which has been continuously refined and enhanced over the past 14 years, to measure the size of global wealth markets.

    Our definition of wealth includes the amount of cash, deposits, and listed securities held either directly or indirectly through managed funds and life and pension assets. Such assets can typically be monetized easily. Other assets, more difficult to monetize and thus excluded, include any real estate (primary residence as well as real estate investments), business ownerships, and any kind of collectibles, consumables, or consumer durables such as luxury goods.

    The market-sizing model of Riding a Wave of Growth: Global Wealth 2014 covers 63 countries accounting for more than 95 percent of global GDP (real GDP in U.S. dollars at 2005 constant prices). For the year 2013, we calculated personal financial wealth for 43 large countries (about 91 percent of global GDP) through a review of national accounts and other public records. For an additional 20 smaller countries (about 5 percent of global GDP), we calculated wealth as a proportion of GDP, adjusted for country-specific economic factors.

    We then distributed total wealth within each country by household (not by individuals or adults) on the basis of a proprietary Lorenz curve methodology. These curves were based on a combination of wealth distribution statistics for countries that had available data. For countries without such data, we developed estimates on the basis of wealth distribution patterns of countries with similar income distributions (Gini coefficients) compiled by the World Bank. We further refined the wealth distribution using other public sources such as “rich lists” and BCG proprietary information.

    We used available national statistics to identify different asset-holding patterns for the individual wealth segments in each country. When such data could not be obtained, we assumed that countries with similar cultures and regulatory environments would have similar asset-holding patterns. Finally, we calculated market movements as the weighted-average capital performance of asset classes held by households in each country, factoring in domestic, regional, and international holdings.