1 / 31

Acknowledgements

Individual Net Worth in New Zealand: A Preliminary Analysis of a New Survey John K Gibson & Grant M Scobie Conference of the NZ Society of Actuaries Rotorua, November 13-15 , 2002. Acknowledgements. Statistics NZ Office of the Retirement Commissioner. Outline. New Survey Some Basic Results

cleo
Download Presentation

Acknowledgements

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Individual Net Worth in New Zealand: A Preliminary Analysis of a New SurveyJohn K Gibson & Grant M ScobieConference of the NZ Society of ActuariesRotorua, November13-15, 2002

  2. Acknowledgements • Statistics NZ • Office of the Retirement Commissioner

  3. Outline • New Survey • Some Basic Results • What Determines Net Wealth • Are there Ethnic differences? • Do Student Loans matter? • Human capital – a hidden asset? • Conclusions and Unfinished Business

  4. Household Saving Survey • Net wealth of NZ households • 2001 – first time; assets & liabilities • Background: Retirement Income Act 1993 • Periodic Review Group • 6,600 households approached • Plus Maori “booster” sample • 74% response rate : n = 5374

  5. Coverage • Households (not institutions) • 18+ age • Resident of NZ • One individual per household – randomly selected. • If couple present, then both included – assumed wealth was split 50:50

  6. Sample Size

  7. House 36% Farms & Business 18% Super. & Life Ins 8% Trusts 6% Shares & Funds 6% Bank deposits 6% Rental Prop 4% M/Vehicles 4% TOTAL $444bn Mortgage 80% Bank Debt 10% Student Loan 5% Credit Card/ HP 4% TOTAL $68bn Assets & Liabilities

  8. Type of Liability Median Value Percentage of all individuals reporting holding this asset (%) Mortgage $68,000 17.0 Student Loan $9,000 20.6 Credit Card $800 33.7 Bank debt $2,000 21.5 Hire purchase $1,000 14.9 Structure of liabilities: individuals

  9. Type of Asset Median Value Percentage of all individuals reporting holding this asset (%) Property $139,000 36.7 Super $12,000 11.6 Business $30,000 4.4 Bank deposits $1,200 89.0 Trusts $101,700 1.4 Maori assets $15,000 2.8 Structure of assets: individuals

  10. Structure of assets: international

  11. Level of Net Worth Percentage of Individuals Negative 23 $0 - $20,000 34 $20,001 - $100,000 16 $100,001 - $500,000 23 $500,001 and more 4 Total 100 Distribution of Net Worth

  12. Inequality in the Distribution of Income and Wealth 100 Perfect Equality Share of Income or Wealth HDI NW 0 50% 100 Proportion of individuals

  13. Gini Coefficients: 0.322 0.689 1 UNEQUAL 0 EQUAL Household Disoposable Income Net Worth

  14. Net Worth by age: individuals

  15. What matters for net worth?…1

  16. What matters for net worth?…2

  17. What matters for net worth?…3

  18. What matters for net worth?…4

  19. What matters for net worth?…5 Labour Force status relative to part-time

  20. What matters for net worth?…6

  21. What matters for net worth?…7 Occupation relative to not in labour force

  22. Individual Net Worth by Ethnicity Ethnic Group Mean Median European/Pakeha 119,900 21,700 Maori 38,900 800 Pacific Islands 46,400 0 Asian 59,900 3,000 Total 97,900 10,300

  23. Effect of Ethnicity on Individual Net Worth: Conditional Estimates Ethnic Group Coefficient t-value Maori -350 -0.04 Pacific Islands 16,900 +1.06 Asian 52,900 +3.17 Constant 118,500

  24. Factors explaining Maori-Pakeha differences in net worth

  25. Human Capital? • Plumber: • Assets: $120,000 • Liabilities: $60,000 NET = +$60,000 • Dental Student: • Assets: Nil • Liabilities: $60,000 NET = - $60,000 • Something is missing?

  26. Estimating human capital Present value of future labour earnings Allow for unemployment, real growth and survival Recursive Allows for market based labour income to age 65 No change of status - conservative

  27. Human capital of Pakeha females

  28. Human capital of Pakeha males

  29. Conclusions…1 • Unequal distribution of wealth • Partly reflects age structure • Age is a key variable • Income matters • Not much else: • Gender  • Marital status  • Migration 

  30. Conclusions…2 • Inheritances matter • Secondary schooling matters • Buying property matters • Years employed matters • Student loans – some modest effect • No ethnic effect • Human capital – could be very important

  31. Caveats • Only for individuals – not couples • No cohort effects • Incorporate human capital • Retirement income adequacy • Still 60% unexplained variation

More Related