Thousands of Billionaires

Below is an analysis of recorded billionaires in 1996, 2001, and 2014. The data contains 2,615 records of billionaires during these periods and has information on the individual’s net worth, country, industry, age, and whether they were self-made or inherited their wealth.

The first thing I wanted to analyze was the number of billionaires over time and split them by how they came into their wealth (e.g. self-made or inherited). It seems like the number of people who inherited their wealth doubled between 2001 and 2014, and the number of people who created their own wealth tripled between 2001 and 2014.

There are various factors that could contribute to the increase in total billionaires. A couple I could think of are (1) overall global market growth and (2) lower barrier to entry for businesses. I think market growth could help explain the growth of people who inherited their wealth (this sounds very obvious, I know). Marketing growth typically correlates to the Dow Jones Industrial Average. In 2001, the index was at about 10,200 and in 2014 it grew to about 16,500. It’s not quite double, but does validate market growth. As for the second point (lower barrier to entry), resources are more accessible than ever because of the internet and the increase quality of search/online resources. In 2001, only 8.1% of people used the internet and this grew to about 40.7% in 2014 (1). Again, this point is very anecdotal, but helps validate the growing presence of internet.

The next component I wanted to look at was net worth of billionaires over time. The graph below is a box-and-whisker plot (yes, I was actually able to use one in an analysis) of the net worth of the individuals over time.

This plot shows that the variance and the median grow over time. It also shows that 2014 has a long tail, meaning there are a few billionaires that are extraordinarily rich compared to the rest of the billionaire population. 2014 also has a very high density of billionaires that have a net worth of under $2 billion. I thought this was interesting, so I took a deeper dive into the net worth of billionaires in 2014.


Above is a histogram of net worth of billionaires in 2014. This graph shows that over 1/2 of all billionaires in 2014 have a net worth that’s less than $2.5 billion.

The last thing I wanted to take a look at was the industry that created the billionaire. The box-and-whisker below represents net worth by the average top 10 industries in 2014. For the most part, the medians are quite similar across all of the noted industries.

For those who want to explore this data set on their own, I found the data from this data source (note it’s in the zip file).

Cite:

(1) http://www.internetlivestats.com/internet-users/



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