April 15, 2024
Written by WID.world

Asset-price redistribution

Over the last several decades, there has been a large increase in asset valuations acrossmany asset classes. While these rising valuations had important effects on the distribution of wealth, little is known regarding their effect on the distribution of welfare.

To make progress on this question, Andreas Fagereng, Matthieu Gomez, Emilien Gouin-Bonenfant, Martin Holm, Benjamin Moll, and Gisle Natvik develop a sufficient statistic for the money-metric welfare effect of deviations in asset valuations (i.e., changes in asset prices keeping cash flows fixed). This welfare effect 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. They operationalize this approach by using Norwegian administrative panel data on asset transactions from 1994 to 2019 and quantify the distribution of welfare gains over this time period.


Key findings:

  • The rise in asset valuations had large redistributive effects, i.e., they resulted in significant welfare gains and losses. At the same time, welfare gains differed substantially from naïvely calculated revaluation gains; in particular, individuals with the highest revaluation gains were not necessarily the ones with the highest welfare gains.
  • Rising asset prices redistributed across cohorts, with the old benefiting at the expense of the young.
  • They redistributed across the wealth distribution, from the poor toward the wealthy.
  • They also redistributed across sectors: declining interest rates benefited households at the expense of the government.



  • Andreas Fagereng, BI Norwegian Business School
  • Matthieu Gomez, Columbia University
  • Emilien Gouin-Bonenfant, Columbia University
  • Martin B. Holm, University of Oslo
  • Benjamin Moll, London School of Economics
  • Gisle Natvik, BI Norwegian Business School



  • press[at]wid.world