The Rich Are Not Who We Think They Are. And Happiness Is Not What We Think It Is, Either.

Seth Stephens-Davidowitz in The New York Times: We now know who is rich in America. And it’s not who you might have guessed. A groundbreaking 2019 study by four economists, “Capitalists in the Twenty-First Century,” analyzed de-identified data of the complete universe of American taxpayers to determine who dominated the top 0.1 percent of earners. The study didn’t tell us about the small number of well-known tech and shopping billionaires but instead about the more than 140,000 Americans who earn more than $1.58 million per year. The researchers found that the typical rich American is, in their words, the owner of a “regional business,” such as an “auto dealer” or a “beverage distributor.”

…The most important happiness study, in my opinion, is the Mappiness project, founded by the British economists Susana Mourato and George MacKerron. The researchers pinged tens of thousands of people on their smartphones and asked them simple questions: Who are they with? What are they doing? How happy are they? From this, they built a sample of more than three million data points, orders of magnitude more than previous studies on happiness. So what do three million happiness data points tell us? More here.

In the last few decades of the twentieth century, the primary
driver of rising top incomes was wage income growth. Since then, rising capital income has shifted focus to the role of capital and financial wealth. Understanding the nature of top incomes is essential for explaining their evolution and assessing policy implications. Are America’s top earners financial-capital rich—those who derive most of their income from nonhuman capital—or are they human-capital rich—entrepreneurs and wage earners who derive most of their income from their human capital?

This article uses deidentified administrative tax data to characterize top incomes and their rise in the twenty-first century. Throughout, we measure income using directly observed fiscal income from tax returns following Piketty and Saez (2003) and imputed national income following Piketty, Saez, and Zucman (2018)(PSZ). We first establish how much top earners make from three broad sources: wage income, business income, and other capital income such as interest and rent payments. In 2014, most income at the very top is nonwage income, the primary source of which is business income. More here.