Bestände und Konzentration Privater Vermögen in Österreich

This report provides an estimation of the Austrian wealth distribution based on the second wave of the Household Finance Consumption Survey (HFCS). The HFCS, conducted by the European System of Central Banks, is the best data source for empirical research on private wealth across Europe and is therefore of great importance for studying issues of distribution and wealth. This article particularly focuses on the top of the wealth distribution and introduces an estimation process for the consideration of differential non-response. While the HFCS data is an indispensable source for inequality research, it still faces the common problems of survey data on private wealth, namely the lacking coverage of the richest households. This leads to a systematic underestimation of total wealth and wealth inequality. In this paper, we aim to adjust for the undercoverage at the top of the distribution based on the assumption that the top of the wealth distribution follows a power-law. We extend this approach by also considering the role non-response bias, as there is some evidence that this aspect has become more important in the second wave of the HFCS in Austria. To account for this problem, we initially test different estimation methods by the use of Monte-Carlo simulations. Subsequently, we adjust the data accordingly to estimate the amount of wealth held by the top of the distribution. Our results show that total wealth and wealth inequality are underestimated in the HFCS raw data. Using the adjusted data, total wealth rises from 998 bn. to 1,317 bn. euro, average wealth rises 83,000 euro, and the top one percent’s share of total wealth jumps from 25 to 41 percent. These results are qualitatively in line with previous research of Eckerstorfer et al. (2013) on the first wave of the HFCS. Finally, the report provides estimates of potential tax revenues from various wealth taxation models. Depending on tax exempt amounts, tax rates and tax evasion, such taxes could generate 2.9 to 8.3 billion Euros in Austria.