vermogenscurves

Vermogenscurves, or wealth distribution curves, are graphical tools used in economics and social science to illustrate how wealth is distributed across a population. Each curve shows the cumulative share of wealth held by the population when individuals, households, or units are ordered by increasing wealth. On the horizontal axis is the cumulative share of units (from 0 to 100%), and on the vertical axis is the corresponding cumulative share of wealth (0–100%). The curve starts at (0,0) and ends at (1,1). A line of equality at 45 degrees represents perfect equality; the vermogenscurve typically lies below this line, reflecting concentration of wealth toward the top.

In many contexts the vermogenscurve is equivalent to the Lorenz curve for wealth. The more bowed the curve, the higher the inequality. The Gini coefficient can be derived as twice the area between the vermogenscurve and the line of equality.

Uses and implications: It allows comparison across countries, regions, or time periods, and informs policy analysis related to taxation, social transfers, and wealth accumulation. Analysts may also focus on specific portions of the curve, such as the shares held by the top 1% or top 10%, to study concentration.

Limitations: Wealth data are challenging to collect and may be incomplete due to underreporting, non-response, top-coding, and differences in how wealth is defined (net worth, assets minus debts). Distortions can arise from age structure, household composition, and valuation methods.

See also: Lorenz curve, Gini coefficient, Palma ratio, wealth concentration, inequality.