Recalculating wealth: Germans are much richer than expected

Recalculation of assets
Germans are much richer than you think

Previous statistics have evidently piled far too low when calculating prosperity in this country. In total, Germany has four trillion euros more wealth, researchers calculate. A certain part of society in particular has increased significantly.

Previous statistics have clearly underestimated German wealth. This is the result of a joint study by a research team from Humboldt University and the University of Bonn with the German Institute for Economic Research (DIW). “Germany is significantly richer than the official statistics show,” the economists conclude. From the point of view of the experts, the reason lies primarily in the fact that the increase in the value of tangible assets over the past decades has not been taken into account.

A recalculation that takes this increase in value into account shows “that the total wealth of the Germans is four trillion euros higher than previously assumed,” says DIW expert Charlotte Bartels ntv. Half, that is two trillion, went to the account of the higher real estate assets, the other half came from the increase in the value of corporate assets. According to the co-author of the study, which was published in May and recently picked up by various media outlets, both were underestimated by the official statistics.

“If I buy a house in a metropolitan area where prices have risen sharply in recent years, I have automatically become richer on paper without saving more,” explains Bartels. According to the authors, the underestimated estimates of unlisted companies are also due to a bias that is worth significantly more than in statistics based on pure book values. This has probably led to significant deviations, especially in a European comparison, because unlisted companies play a particularly important role in Germany.

Especially the rich get richer

According to the researchers, another source of error was due to the fact that the figures were mostly based on representative surveys of the population. However, the wealth that the respondents reported was too low in relation to the total wealth of Germans. The authors of the study therefore consulted additional sources to get a more accurate picture of the economic situation. In addition to the classic household surveys, they also took into account, for example, tax data and lists of the rich.

Based on the new figures, the wealth threshold above which someone can count themselves among the wealthier half of the population has shifted upwards accordingly. It is now at 130,000 euros. With assets of 946,000 euros, you belong to the top 10 percent and from four million euros to one percent of the richest of the rich in Germany. Only money and property that can be sold in the market flowed into the calculations. The researchers did not take into account pension payments that people receive.

(Photo: ntv/Albers, Bartels, Schularick)

With the recalculation, one thing in particular becomes even clearer: the wealth gap in society is much greater than previously assumed. Those with little wealth have fallen even further behind than previous statistics have shown. Because the wealthy half of the population has become significantly richer in recent decades, because it is they who own large amounts of real estate and company shares, where the large price increases have been recorded in recent years.

As the study also shows, the rich upper class was unable to separate itself from the middle class. The middle class in particular has benefited since around 2010 from the meteoric rise in property prices, “which represent the most important asset class for them”. Since the poorer half of society practically only has savings accounts and life insurance, according to Bartels, there is no corresponding increase in wealth. Seen in the light of inflation in Germany of almost eight percent, it is not expected that the difference will be closed again in the foreseeable future. On the contrary, the wealth gap is likely to widen further.

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