Slide 1

The Role of Assets and their Distribution in the Estimation of Economic Well-BeingPresentation at the 4th OECD World Forum on Measuring Well-being for Development and Policy Making

October 16-19, 2012, Delhi, IndiaSession 1B: The Role of Assets and their Distribution,Dr. Andrew Sharpe (Center for the Study of Living Standards, Canada)

1Outline of PresentationA Review of Assets Types

The Role of Assets in the Index of Economic Well-Being (IEWB)

The Role of Assets in the Levy Institute Measure of Well-Being (LIMEW)

Recommendations for Data on Assets

22I. Review of Asset Typesby sector (household, business, government)

by individual (personal) or collective ownership

by financial (e.g. bank deposits, stocks, bonds) or non-financial (e.g. residential and non-residential capital stock, natural resources, human capital, ecosystems, and intangible capital) assets

Micro versus macro approaches

33II. The Role of Assets in the Index of Economic Well-being (IEWB)

The IEWB has developed by Lars Osberg from Dalhousie University and Andrew Sharpe from the Centre for the Study of Living Standards

It was first published in 2002 in the Review of Income and Wealth

It is a composite index that includes variables expressed in monetary unites and in index form 445

Exhibit: The CSLS Index of Economic Well-being: Weighting Tree for Canada and the Provinces 5Chart 1: Trends in the Overall Index of Economic Well-Being and GDP per Capita, Canada, 1981-2010, Indexed, 1981=1006

Chart 2 Components of the Wealth Domain, Canada, 2002 Dollars, 1981 and 20107

Chart 3: Trends in Per-Capita Wealth and its Components, Canada, 1981-2010, Indexed, 1981=1008

Chart 4: Per-Capita Net Capital Stock, Canada and the Provinces, 2002 Dollars, 1981 and 20109

Chart 5: Per-Capita Stock of Natural Resources, Canada and the Provinces, 2002 Dollars, 1981 and 201010

Chart 6: Total Per-Capita Wealth in Canada and the Provinces, 1981 and 201011

Chart 7: Index of the Wealth Domain in Canada and the Provinces, 1981 and 201012

III. The Role of Assets in the Levy Institute Measure of Well-being (LIMEW)The Levy Institute Index of Economic Well-being (LIMEW) was developed by economists at the Levy Institute at Bard College in New York state in the early 2000s.

the LIMEW is calculated at the household level and is expressed in monetary terms.

estimates of the LIMEW for Canada were developed by the Centre for the Study of Living Standards in partnership with the Levy Institute13Table 1: Components of LIMEW14

Table 2: Compositions of LIMEW by Quintiles, US and Canada15

Chart 8 Composition of LIMEW16

Table 3: Factors Affecting Income From Wealth (Mean Values, 2000 PPP$)17

Table 4: Contribution of Major Components to the Change in LIMEW of the Middle Quintile (per cent)18

Chart 9: Composition of LIMEW by Major Component (per cent)19

Chart 10: Contribution to the Change in Average LIMEW for Each Component (percentage point)20

Chart 11: Composition of LIMEW of the Middle Quintile by Major Component (per cent)21

Chart 12: Gaps Between Canada and the US in the Disparities Between Elderly and Non-Elderly Households by Component22

IV. Recommendations for Data on Assets

Non-Financial or Real Assets develop an internationally comparable time series for physical capital asset develop internationally comparable time series of human capital develop internationally comparable time series of natural resources continue conceptual work on intangible capital and develop internationally comparable time series explore methodologies of the valuation of ecosystems Financial Assets encourage more countries to conduct wealth survey and to increase their frequencywork toward the standardization of definitions of different asset types across countries

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