Report on Regional Wealth Inequality in Spain and Its Implications for Sustainable Development Goals (SDGs)

Introduction

Accurate measurement of wealth at the regional level is essential for designing policies that address wealth inequality effectively. This is particularly significant in countries like Spain, where administrative decentralisation delegates substantial public spending and revenue management, including wealth-related taxes, to regional authorities. Understanding regional wealth disparities aligns with the Sustainable Development Goals (SDGs), particularly SDG 10 (Reduced Inequalities) and SDG 1 (No Poverty).

Study Overview

The paper authored by Gustavo A. Marrero, Clara Martínez-Toledano, Juan César Palomino, and Dmitry Petrov presents the first comprehensive analysis of regional wealth inequality in Spain. The study integrates administrative fiscal data, household surveys, and national accounts from 2016 to 2022. The resulting data series are publicly accessible via the Spain Wealth Atlas, a tool that visualizes wealth evolution and distribution across Spanish regions and various indicators. This resource supports SDG 16 (Peace, Justice, and Strong Institutions) by promoting transparency and informed policymaking.

Key Findings

National Level Insights

1. Stable Average Net Household Wealth: Between 2016 and 2022, average net household wealth increased nominally from approximately €335,000 to €380,000. However, when adjusted for inflation using the GDP deflator, the average remained stable at around €380,000 in 2022 euros.
2. Dominance of Housing Assets: Housing assets constituted over 50% of total wealth in 2022, making them the primary contributor to household wealth. Investment real estate properties saw the largest growth, rising from 11.5% in 2016 to nearly 14% in 2022.
3. Variation in Asset Portfolios by Wealth Level:
   • For the poorest 20%, current accounts represent 63% of their asset portfolio.
   • For the top 10%, investment properties, business assets, equities, and investment funds are more significant.
4. Increasing Wealth Concentration: Wealth concentration has intensified, with the top 1% holding 26%-27% of total wealth and the top 10% owning nearly 60%. The upper middle class (next 40%) controls about 35%-36%, while the bottom 50% holds only around 7%. This disparity highlights challenges related to SDG 10 (Reduced Inequalities).

Regional Level Insights

• Madrid’s Wealth Leadership: Madrid exhibits the highest average household wealth at €687,000, approximately 80% above the national average.
• Asset Composition and Inequality: Regions with greater wealth inequality tend to have a higher share of investment real estate and financial assets among the wealthiest 10%, and a lower proportion of wealth tied to primary residences among middle and lower-middle income groups.

Visual Data Resources

The study includes detailed visualizations illustrating wealth distribution and asset composition across regions, accessible through the Spain Wealth Atlas platform.

Authors and Affiliations

• Gustavo A. Marrero, Universidad de La Laguna (Department of Economics & CEDESOG), EQUALITAS & SMN
• Clara Martínez-Toledano, Imperial College London, World Inequality Lab & ESADEEcPol
• Juan César Palomino, Universidad Complutense de Madrid (Department of Economic Analysis & ICAE), EQUALITAS & INET Oxford
• Dmitry Petrov, Universidad de Alcalá & EQUALITAS

Media Contact

• Alice Fauvel, Communications Manager
• Email: alice.fauvel[at]psemail.eu ; press[at]wid.world

Conclusion

This comprehensive analysis of regional wealth inequality in Spain provides valuable insights for policymakers aiming to achieve the Sustainable Development Goals, especially SDG 10 (Reduced Inequalities) and SDG 1 (No Poverty). The Spain Wealth Atlas serves as a critical tool for monitoring wealth distribution and guiding equitable economic policies at both national and regional levels.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 10: Reduced Inequalities
   • The article focuses on wealth inequality in Spain, highlighting disparities in wealth distribution among different population segments and regions.
2. SDG 1: No Poverty
   • By analyzing wealth concentration and the low share of wealth held by the bottom 50%, the article indirectly relates to poverty reduction efforts.
3. SDG 11: Sustainable Cities and Communities
   • The emphasis on housing assets and regional disparities in wealth ties into urban development and housing affordability issues.
4. SDG 16: Peace, Justice and Strong Institutions
   • The article highlights the importance of administrative decentralization and regional management of public spending and taxation, which relates to effective institutions and governance.

2. Specific Targets Under Those SDGs Identified

1. SDG 10: Reduced Inequalities
   • Target 10.1: Achieve and sustain income growth of the bottom 40% of the population at a rate higher than the national average.
   • Target 10.2: Empower and promote the social, economic and political inclusion of all, irrespective of wealth status.
2. SDG 1: No Poverty
   • Target 1.2: Reduce at least by half the proportion of people living in poverty in all its dimensions according to national definitions.
3. SDG 11: Sustainable Cities and Communities
   • Target 11.1: Ensure access for all to adequate, safe and affordable housing and basic services.
4. SDG 16: Peace, Justice and Strong Institutions
   • Target 16.6: Develop effective, accountable and transparent institutions at all levels.

3. Indicators Mentioned or Implied to Measure Progress

1. Wealth Concentration Metrics
   • Share of total wealth held by top 1%, top 10%, middle 40%, and bottom 50% of the population.
   • Average net household wealth measured in euros, adjusted for inflation.
2. Asset Composition Indicators
   • Proportion of wealth held in housing assets versus investment real estate, financial assets, and current accounts.
   • Changes in asset portfolio composition by wealth level (e.g., poorest 20% vs. top 10%).
3. Regional Wealth Disparities
   • Average wealth per household by region (e.g., Madrid’s €687,000 average vs. national average).
   • Distribution of wealth types among different regions and wealth groups.
4. Data Accessibility and Updates
   • Use of the Spain Wealth Atlas as a tool for ongoing monitoring and visualization of wealth distribution and evolution.

4. Table of SDGs, Targets, and Indicators

Source: wid.world