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How did the wealthiest New Zealanders get so rich?

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  • Tim Hazledine
  • John Siegfried

Abstract

It has been found that, in Australia, the United States and Great Britain, about two-thirds of large personal fortunes originated in industries which economists would judge to be “competitive “, in the sense that entry and exit is easy so that marginal firms are not expected to earn above-normal profits. The possible explanations for this striking phenomenon are (a) returns to risk, (b) disequilibrium, and (c) inframarginal rents. This paper replicates the earlier analyses for New Zealand, using fortunes identified on the National Business Review's annual “Rich List” as the basis for the database. Seventy-nine per cent of New Zealand fortunes originated in industries judged to be competitive. The rate of new fortune accumulation has been steady since the Second World War. The most likely sectors for fortunes to appear in are manufacturing, and the “deal-making” industries (merchant banking, brokerage, insurance, real estate and property development). Nearly three-quarters of the fortunes were self-made. The proportion earned by first-generation immigrants just about exactly matches the proportion of such people in the general population (unlike the case in Australia).

Suggested Citation

  • Tim Hazledine & John Siegfried, 1997. "How did the wealthiest New Zealanders get so rich?," New Zealand Economic Papers, Taylor & Francis Journals, vol. 31(1), pages 35-47.
    • Handle: RePEc:taf:nzecpp:v:31:y:1997:i:1:p:35-47
    DOI: 10.1080/00779959709544264
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    Cited by:

    1. Lachlan Hotchin & Andrew Leigh, 2024. "Inequality and Market Concentration: New Evidence from Australia," CAMA Working Papers 2024-12, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Benno Torgler & Marco Piatti, 2013. "Extraordinary Wealth, Globalization, And Corruption," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(2), pages 341-359, June.
    3. Eric Neumayer, 2004. "The super-rich in global perspective: a quantitative analysis of the Forbes list of billionaires," Applied Economics Letters, Taylor & Francis Journals, vol. 11(13), pages 793-796.
    4. Aloys Prinz, 2016. "Do capitalistic institutions breed billionaires?," Empirical Economics, Springer, vol. 51(4), pages 1319-1332, December.
    5. Benno Torgler & Marco Piatti, 2013. "Extraordinary Wealth, Globalization, And Corruption," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(2), pages 341-359, June.
    6. Stephen Martin, 2012. "Market Structure and Market Performance," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 40(2), pages 87-108, March.
    7. Jason Potts, 2006. "How Creative are the Super-Rich?," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 13(4), pages 339-350.

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