Bernhard Schütz

Correcting for the Missing Rich: An Application to Wealth Survey Data

It is a well-known criticism that if the distribution of wealth is highly concentrated, survey data are hardly reliable when it comes to analyzing the richest parts of society. This paper addresses this criticism by providing a general rationale of the underlying methodological problem as well as by proposing a specific methodological approach tailored to correcting the arising bias. We illustrate the latter approach by using Austrian data from the Household Finance and Consumption Survey. Specifically, we identify suitable parameter combinations by using a series of maximum-likelihood estimates and appropriate goodness-of-fit tests to avoid arbitrariness with respect to the fitting of the Pareto distribution. Our results suggest that the alleged non-observation bias is considerable, accounting for about one quarter of total net wealth in the case of Austria. The method developed in this paper can easily be applied to other countries where survey data on wealth are available.

From free to civilized trade: a European perspective

Abstract In the context of unfettered international competition, free trade tends to undermine basic moral concepts such as justice, dignity, and fairness. Therefore, we suggest moving to a new understanding of markets in international trade, which we call ‘civilized markets’. A civilized market tries to ensure that free entrepreneurship and open markets are eventually compatible with those basic and universal values that also serve as moral cornerstones of the European project. In order to accomplish a civilized market, we propose to establish a new European institution with a mandate to set and enforce minimum standards for goods sold on the European market.