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Poorer, overall

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Photo: iStock

Most evidence points to millions having been pushed into poverty, even as owners of corporate equity saw their net worth go up as stock markets boomed. Clearly, we need better statistical tools

The latest Credit Suisse Global Wealth Report presents a mixed bag. While the wealth of Indian households saw a 6.1% decline in 2020, by its data crunching, the country has done less badly than China on its Gini coefficient chart of wealth inequality. At 82.3, our figure was only a tad above 2019’s level of 82 on a scale which goes higher the more concentrated a country’s wealth is. China saw a sharper concentration last year.

While the Gini coefficient is widely used to track wealth distribution, its formula uses such large aggregations of people as data inputs that it simply lacks sensitivity to cases of a disproportionate share of it held by very few people. While this metric offers a useful overall picture in a broad sense, it also fails to adequately reflect changes in financial status if wealth levels at the bottom are negligible to begin with. So a tiny change recorded in that measure for 2020 should not be taken as an assurance that covid did not widen our gaps of well-being by much. Most evidence points to millions having been pushed into poverty, even as owners of corporate equity saw their net worth go up as stock markets boomed. Clearly, we need better statistical tools.

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