Exposing The World’s Superrich: GDP, Gender, And Political Ties

The Peterson Institute for International Economics compiled one of the most extensive datasets yet on over 2000 billionaires from all over the world. Using the Forbes World’s Billionaires List and additional research, PIIE researchers Caroline Freund and Sarah Oliver created their Billionaires Characteristics Database (available for download here).

We found this dataset to be a treasure trove for analysis. By looking at data for each billionaires’ net worth at different times in the past 20 years, possible political connections and details on the origins of all that wealth can be explored.

The sum net worth of the world’s superrich in 2014: use the filter to compare within regions:

What amount of riches are we talking about?

The 2073 billionaires covered in the database had, in 2014, a combined net worth of US$6.45 trillion (to be clear, that is 6.45 million million dollars!). Compared to that same years’ global GDP, the superrich, constituting 0.00003% of the world’s population, held assets equivalent to 8.29% of the global value produced. Top of the list is Bill Gates with a personal net worth of US$76 billion, closely followed by the Mexican telecom-mogul Carlos Slim with US$72 billion.

Billionaires are most abundant in the United States (about 1 in 3 billionaires is a US citizen), where together they account for US$2.3 trillion. But taking total population numbers into account shows that some other countries have a higher number of billionaires per capita: in particular Hong Kong, Switzerland and Singapore stand out with relatively high billionaires-to-citizens ratios (8 billionaires for every million citizens in Hong Kong).

Data available for the years 1996, 2001 and 2014 allows us to take a look at how the billionaires’ fortunes have fared over the past two decades. The net worth of 406 billionaires in the dataset could be tracked between either 1996 and 2014 or 2001 and 2014. These values were then compared to provide an average growth rate of each billionaire’s wealth. 80% of this group saw their fortune grow over the years, while less than 100 billionaires took some losses.

No one took a bigger hit than Nobutada Saji, who saw over US$6 billion of worth disappear in recent years. But overall, it has been profitable times for the world’s billionaires. The biggest winners, like Sheldon Adelson and Michael Bloomberg, had their net worth increase over thirty-fold between 1996 and 2014.

One other way of looking at an individual’s wealth — when we’re talking about billions — is comparing it to the GDP of the country they reside in. While the Bill Gates and Carlos Slims of the world can boast the highest total amounts of dollars, they live in countries where their wealth is still only a drop in the bucket. In some other smaller economies, being a billionaire can mean your wealth equals a considerable portion of your country’s GDP — like Bidzina Ivanishvili matching 31% of Georgia’s GDP, or Nathan Kirsh matching 84% of Swaziland’s. There’s one billionaire however, whose wealth is actually larger than the entire economy of his home country: the tiny island-nation St. Kitts and Nevis’ US$850 million economy is dwarfed by Jacky Xu’s US$1.2 billion of net worth.

Top 20 billionaires in net worth relative their country’s GDP:

Who are we talking about?

With 552 self-made billionaires — 66% of its total stock — the American continent shows itself to be a place with relative economic mobility for the superrich. Europe, comparatively, has a lot of Old Money: 42% of European billionaires inherited their money. The highest percentage of self-made billionaires can be found in Asia though: over 3 quarters of Asian billionaires made their own fortune.

The Gender Divide

Probably unsurprisingly, men make up the vast majority of the world’s superrich: 89.7%, or 1828 billionaires in the database are men while 10.3%, or 209 are women. This balance is even worse, from a gender-equality point of view, when we look at self-made billionaires. From a total of 1354 self-made billionaires, only 41, or 3% are women.

There are also some big regional differences in the billionaires’ gender distribution. The American continent has the highest percentage of female billionaires: Latin America, with 19% women, has by far the highest score in this respect. The gender distribution is most skewed in Asia: 500 billionaires but only 5% are women.

Political Ties

The PIIE found evidence for political connections for 68 billionaires, of which 21 are Russian. Almost all of the politically-connected superrich have self-made fortunes and are from emerging markets. Bigger riches does not seem to correlate with a higher chance of political connections, as most in this group are ‘mere’ single-digit billionaires. Having political ties also doesn’t seem to be correlated to the billionaires’ wealth, relative to the GDP of its home country. When your worth rivals your country’s entire economy, it’s not hard to imagine how much weight your political positions would carry —however most of the billionaires with a high relative wealth have not been identified to have political ties.

The top 10 superrich with political ties, sorted by their relative wealth are mostly self-made billionaires from Eastern Europe or the Middle East:

What are the sources of all that wealth?

First off, while there’s a vast number of different (business) sectors spawning billionaires over the world , over 90% of these sectors can be linked to only one or a handful of billionaires — only some 30 different sectors have been at the base of the wealth of many. Real estate tops this list of fruitful sectors: at least 145 billionaires accrued their wealth in the real estate business.

Top 12 sectors in which billionaires made their riches. The count shows the number of billionaires by sector:

The regional differences are considerable however:

When comparing self-made billionaires with the ones that came from money some more stark differences appear. Most inherited money has originally been made in construction, retail, media, banking and real estate (with each of these sectors accounting for a comparable number of billionaires). The group of self-mades is far more concentrated in just one sector: real estate (accounting for more than double the amount of billionaires than the next sector, retail).

So much more to dig into

As the data published by the PIIE is part of a working paper, it’s certain there is more to come. But the dataset in its current form already has so much more to dig into. As an ongoing analysis, additional findings and charts will be added to this online database — feel free to explore and visualize the data yourselves.

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