Letter to the Editor of the FT 4.VI 14
On final debatable question by the FT to Prof Piketty’s renown book
From Dr Ülo Ennuste
Sir, In – “Technical appendix of the book « Capital in the twenty-first century»
Appendix to chapter 10. Inequality of Capital Ownership Addendum: Response to FT“ Thomas Piketty, May 28 2014 (http://piketty.pse.ens.fr/capital21c)
– on the p10 we can find this question by Mr Giles and Piketty’s answer:
“Finally, the FT also expresses the following concern: the European average series, which I computed by making a simple arithmetic series between France, Britain and Sweden, should have been computed using population weighted averages. I do agree that population (or GDP) weighted averages are generally superior to simple arithmetic averages. … But in case Britain did follow a markedly different pattern than the other countries in recent decades (with a decline in wealth inequality rather than a rise), then putting more weight on Britain than on Sweden becomes a significant issue. So we are back to the previous question: what happened to wealth inequality in Britain in recent decades? The FT seems to believe it has become more equal; however the way they use self-reported wealth survey data is not convincing. … “
– If so that in case of Britain the available data is less credible/adequate than for France and Sweden – if that is the case why are the honorable discussers not considering weighing averages according to the reliability of the data – probably theoretically much superior to population or GDP averages – at least on the basis of mathematical information and probabilistic decision theories?
Dr Ülo Ennuste, Fellow of the Institute for European Studies, Tallinn, Estonia
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