4 ms·

> To me wealth inequality is how much of the country's wealth the top % own versus the bottom % That's exactly what the GINI formula is, though. (Pedantry: the

by piaste 3y ago

> To me wealth inequality is how much of the country's wealth the top % own versus the bottom % That's exactly what the GINI formula is, though. (Pedantry: the formula can be applied to any measurement, be it income or wealth or blueberries. We'll assume wealth.) The reason some of those numbers look weird to you is that the most common form of wealth is house ownership. In Germany, Benelux and Scandinavia house ownership is quite low, while in Southern and Eastern Europe it is extremely high. Who is better off? Someone who inherited a home, or purchased it relatively easily, but earns a weak salary? Or someone who must rent because he cannot afford a house, but earns a much higher salary and has more disposable income?

FirmwareBurner 3y ago
>Or someone who must rent because he cannot afford a house, but earns a much higher salary and has more disposable income? Poverty is relative. What use is it earning a high salary than someone from a poorer country if you can't afford to live in your richer country?
- piaste 3y ago
  No, I mean after expenses, rent/mortgage (if applicable) included. To simplify it to the absolute extreme: - A earns 100 and pays 25 in mortgage, or even 0 if he inherited - B earns 300 and pays 100 in rent, but a mortgage would cost him 250, or perhaps he can't get one at all What does it even mean to ask "who is better off" here? On a daily basis, B obviously lives better, that part is simple at least. (I personally moved from A-like to B-like quite recently.) Now when it comes to long-term financial plans, A has a massive illiquid asset, while B has a smaller stream of liquid assets. A is more protected against financial catastrophes - he won't end up homeless, and can keep going with a minimal salary - however B does not have any assets tying him down, so he can more result move to a more prosperous area if needed. And so on. But you look at a wealth map and it'll just tell you that A is "richer"; or you look at an income map and it'll just tell you that B is "richer".

by piaste 3y ago

FirmwareBurner 3y ago

>Or someone who must rent because he cannot afford a house, but earns a much higher salary and has more disposable income? Poverty is relative. What use is it earning a high salary than someone from a poorer country if you can't afford to live in your richer country?

piaste 3y ago
No, I mean after expenses, rent/mortgage (if applicable) included. To simplify it to the absolute extreme: - A earns 100 and pays 25 in mortgage, or even 0 if he inherited - B earns 300 and pays 100 in rent, but a mortgage would cost him 250, or perhaps he can't get one at all What does it even mean to ask "who is better off" here? On a daily basis, B obviously lives better, that part is simple at least. (I personally moved from A-like to B-like quite recently.) Now when it comes to long-term financial plans, A has a massive illiquid asset, while B has a smaller stream of liquid assets. A is more protected against financial catastrophes - he won't end up homeless, and can keep going with a minimal salary - however B does not have any assets tying him down, so he can more result move to a more prosperous area if needed. And so on. But you look at a wealth map and it'll just tell you that A is "richer"; or you look at an income map and it'll just tell you that B is "richer".