Every Christmas, Germany’s central bank sends a selection of Germany’s wealthy a special, fiscal-themed advent calendar. The gift is thanks for the recipient’s participation in the “Private Households and Finance” survey the Bundesbank has performed every three years since 2010. The survey aims to gauge the assets of the 10 percent of Germans that hold 60 percent of the country’s wealth. Some 2,500 households participated in the third iteration of the study, including 380 millionaires, 40 of those worth more than €5 million ($5.9 million).
“People in Germany don’t like to talk about their own money,” says Philipp Marek, an economist in the Bundesbank’s research center and the source of the advent calendars. “Data from households with high net worths are especially important.” Mr. Marek and his people conduct the survey personally, spending more than an hour with participants. The figures in the resultant publicly available report are the “most detailed wealth statistics that exist in Germany.”
But what does that mean? The participants don’t have to tell the truth and there is no mechanism for cross-checking the answers. Even Mr. Marek admits that the survey doesn’t reach into the stratosphere of billionaires. And if these are the most detailed statistics available, then how do the country’s financial magazines so confidently announce their rankings of the richest Germans every year? And it’s not just German magazines – banks and consultancies around the world have special divisions devoted to divining the assets of the well-heeled; UBS, Allianz and CapGemini to name a few.
Daniel Kessler works in the Zurich office of consultancy BCG and is responsible for the European aspect of his employer’s annual Global Wealth report, one of the many reports and rankings that claim to have a bead on the wealth and wealthy from around the world. “In industrialized countries, we rely on surveys of central banks,” Kessler says, explaining the formulas that are then used to extrapolate final figures and add some legitimacy. When it comes to the super-rich? “We orient ourselves on the relevant rankings,” he says.
This is a problem in Germany. Since the country did away with wealth taxes and standardized capital gains taxes in 2009, no dependable statistics exist beyond the Bundesbank’s voluntary survey. In fact, a single journalist is considered to be the biggest expert on the subject – Klaus Boldt. Mr. Boldt has cobbled together lists of Germany’s wealthy regularly since 1999 when he was an editor for Manager Magazin. He has a questionable but possibly more accurate method of data gathering: Mr. Boldt publishes a list and then waits for those included to call, demand a correction or sue, thereby indirectly dialing in the ranking’s accuracy. “Our list is continually updated,” he says.
Mr. Boldt moved to Swiss financial magazine Bilanz four years ago, taking his experience, contacts and data with him. His files include information on 1,400 people with assets supposedly above €100 million. But Mr. Boldt admits some names are on the list because of celebrity, not net worth. “Of course we try to be as exact as possible but in the end it’s a journalistic project, which means it’s also entertainment.” He believes his list is more accurate now than ever, but with one exception: he thinks there are a lot of super-rich people he doesn’t actually know about.
Which raises the one unasked question of the highly publicized rankings of the world’s rich – do they matter? “People who appear on the various rich-rankings don’t necessarily play a relevant economic role as individuals,” says Thomas Bauer, vice president of the Leibniz Institute for Economic Research. That’s especially true in Germany, experts say, because the super-rich are traditionally entrepreneurs, such as the founders – and heirs – of discount grocery stores Lidl and Aldi, with little political clout. By comparison, the super-rich in America are often oligarchs like Donald Trump or financial investors like Warren Buffett with large followings.
Discovering whether or not the super-rich are an asset or a liability to Germany would require more research and information on their holdings – chicken, meet egg. But the DIW German Institute for Economic Research hopes to answer that question. It’s asked the German labor ministry for funding to assemble a research panel of 1,000 households with net worths above €2 million. The institute is working on a pre-test and wants to cast a net covering 10,000 such households in hopes of getting 10 percent to commit to the survey, which will also be held every three years.
The DIW’s survey won’t be reliable until the second or third attempt, which will take almost a decade. Until then, Germany will have to rely on advent calendars.
This article originally appeared in the business magazine WirtschaftsWoche. To contact the author: email@example.com