ASSESSMENT OF WEALTH DIVERSITY (CASE OF LITHUANIA)

Abstract

The high level of income and wealth inequality in the world is recognized as a phenomenon that leads to negative economic and social consequences. The imperfection of redistribution mechanisms has created conditions for the concentration of resources, material goods, and wealth within small population groups. Today, the economic system is not sufficiently focused on the majority of the population, and therefore the high level of inequality and its consequences for economic growth, well-being, and human development cannot be ignored. In this context, economic inequality in Lithuania is one of the most pressing issues, with the country ranking among the highest in the European Union in terms of inequality. Traditionally, economic inequality is measured using indicators of income and consumption distribution; however, to capture its full extent, wealth distribution must also be considered. The main purpose of this article is to identify and emphasize wealth diversity as an integral component of economic inequality in Lithuania, and to examine its implications for quality of life and economic progress, as well as to compare wealth inequality with income inequality. The authors conducted a representative survey of Lithuanian citizens, collecting data on housing and other asset ownership to assess wealth diversity. The results show that the threshold value of assets between the first and tenth deciles differs by 16.9 times, while the difference in average housing values between these deciles is 7.2 times. When all types of assets are considered, including housing, land, and durable goods, the findings reveal that wealth inequality significantly exceeds the levels of income and consumption inequality typically reported by statistical organizations. The decile ratio (between the first and tenth deciles) reaches 40.8, substantially surpassing the corresponding measures of income and consumption inequality.

Data:
Received: 19 Mar 2019
Revised: 4 May 2019
Accepted: 6 Jun 2019
Published: 20 Jun 2019