Grasping Reality on TypePad, by Brad DeLong

Carter Price had a nice piece a couple of months ago that it is worth highlighting:

Carter Price: Miscalculating the Wealth of the Rich Reveals Unintended Biases: "In an ambitious effort...

...Philip Armour... Richard Burkhauser... and Jeff Larrimore... estimate... trends in inequality based on... Haig-Simons... income... consumption plus change in net wealth... [and] claim inequality has not been rising over time.... [Unfortunately] their methodological choices bias the results to downplay relative income growth at the top.... >The Haig-Simons measure introduces substantial volatility as well based on changes in the market valuation of assets.... Mark Zuckerberg... [was] one of the poorest people in the world in 2012 because his net worth fell by $4.2 billion.... Haig-Simons... factor[s] out volatility in realized capital [gains]... but... introduces... volatility in the valuation of capital holdings.... Inflation in housing prices during the 2000s... show[s] up as a rising Haig-Simons income... [but] much of this valuation was a bubble.... The authors... include near-cash benefits... a single national housing index... the Dow Jones Industrial Average... for all types of stock income... limitations on details of high-income households.... Each of these methodological choices will artificially bias their estimates toward a lower valuation of income growth at the top of the distribution...