Lunchtime Must-Read: Technical Appendix: Inequality of Capital Ownership Addendum: Response to FT

Thomas Piketty: Technical Appendix: Inequality of Capital Ownership Addendum: Response to FT: “This is a response to the criticisms…

…which I interpret as requests for additional information – that were published in the Financial Times on May 23 2014…. These criticisms only refer to the series reported in chapter 10 of my book “Capital in the 21st century”, and not to the other figures and tables presented in the other chapters…. Let me start by saying that the reason why I put all excel files on line, including all the detailed excel formulas about data constructions and adjustments, is precisely because I want to promote an open and transparent debate about these important and sensitive measurement issues. Let me also say that I certainly agree that available data sources on wealth inequality are much less systematic than what we have for income inequality…. My problem with the FT criticisms is twofold. First, I did not find the FT criticism particularly constructive. The FT suggests that I made mistakes and errors in my computations, which is simply wrong, as I show below. The corrections proposed by the FT to my series (and with which I disagree) are for the most part relatively minor, and do not affect the long run evolutions and my overall analysis, contrarily to what the FT suggests. Next, the FT corrections that are somewhat more important are based upon methodological choices that are quite debatable (to say the least). In particular, the FT simply chooses to ignore the Saez-Zucman 2014 study, which indicates a higher rise in top wealth shares in the United States during recent decades than what I report in my book (if anything, my book underestimates the rise in wealth inequality). Regarding Britain, the FT seems to put a lot of trust in self-reported wealth survey data that notoriously underestimates wealth inequality…