Together with Joep Keuzenkamp, Bob Rijkers and Katherine Stapleton we have recently published a paper assessing the effect of the energy community provision of the IRA in @pnas.org
Now, A short, non-technical version of the paper is up on @voxeu.org.
![Robust Estimation of Private Business Wealth*
Job Market Paper
Simon J. Toussaint†
November 14, 2024
[Most recent version here]
Abstract
Estimating the market value of private businesses is essential for understanding both aggregate firm dynamics and top wealth
inequality, yet these values are inherently unobservable. This paper introduces an econometric approach that treats the gap
between true market values and initial estimates as measurement error. I employ time-series restrictions on these errors as
moment conditions within a GMM framework, and use the fitted values from these estimations as error-free estimates of
private business wealth and capital stocks. Applying this method to Dutch administrative data linking the universe of firms
to their owners, I find that aggregate private business wealth increases by 30% of GDP initially, and is more stable than the
unadjusted series. Top 1% and 0.1% wealth shares increase by 3–5 percentage points, peaking at 38% and 20%, respectively.
Adjusted returns to firm wealth exhibit a steeper gradient across the wealth distribution than unadjusted returns, consistent
with models of return heterogeneity.](https://cdn.bsky.app/img/feed_thumbnail/plain/did:plc:wus4g34bpbzjefp547irpkeu/bafkreibg34g2k7zwmjqytkllrcxfsj5tnov22hdny74qz7ks5jwa5csbou)
