Asset-price redistribution

Fagereng, Andreas, Gomez, Matthieu, Gouin-Bonenfant, Emilien, Holm, Martin, Moll, Benjamin ORCID: 0009-0003-6067-359X and Natvik, Gisle (2025) Asset-price redistribution. Journal of Political Economy. ISSN 0022-3808 (In Press)

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Abstract

Asset valuations across many asset classes have increased substantially over the last several decades. While these rising valuations had important effects on the distribution of wealth, little is known regarding their redistributive effects in terms of welfare. To make progress on this question, we develop a sufficient statistic for the money-metric welfare gain of deviations in asset valuations. This welfare gain depends on the present value of an individual’s net asset sales rather than asset holdings: higher asset valuations benefit prospective sellers and harm prospective buyers. We estimate this quantity using panel microdata covering the universe of financial transactions in Norway from 1994 to 2019. We further demonstrate how to adapt our baseline statistic to account for important considerations, such as incomplete markets and collateral constraints. We find that the rise in asset valuations had large redistributive effects: it redistributed from the young to the old and from the poor to the wealthy.

Item Type:	Article
Additional Information:	© 2025 The University of Chicago
Divisions:	Economics
Subjects:	H Social Sciences > HB Economic Theory J Political Science
Date Deposited:	12 Sep 2025 10:36
Last Modified:	12 Sep 2025 11:27
URI:	http://eprints.lse.ac.uk/id/eprint/129496

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