Pryor, Frederic L.

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Swarthmore College Works Economics Faculty Works Economics 2-1-2010 Inheritance And Inequality Of Wealth: A Comment Frederic L. Pryor Swarthmore College, fpryor1@swarthmore.edu This work is brought to you for free and open access by . It has been accepted for inclusion in Economics Faculty Works by an authorized administrator of Works. For more information, please contact myworks@swarthmore.edu. Follow this and additional works at: https://works.swarthmore.edu/fac-economics  Part of the Economics Commons Let us know how access to these works benefits you  Recommended Citation Frederic L. Pryor. (2010). "Inheritance And Inequality Of Wealth: A Comment". Current Anthropology. Volume 51, Issue 1. 111-113. DOI: 10.1086/649564 https://works.swarthmore.edu/fac-economics/121 Inheritance and Inequality of Wealth: A CommentAuthor(s): Frederic L. PryorSource: Current Anthropology, Vol. 51, No. 1 (February 2010), pp. 111-113Published by: The University of Chicago Press on behalf of Wenner-Gren Foundation forAnthropological ResearchStable URL: http://www.jstor.org/stable/10.1086/649564 .Accessed: 28/04/2015 15:54Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp .JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact support@jstor.org. .The University of Chicago Press and Wenner-Gren Foundation for Anthropological Research are collaboratingwith JSTOR to digitize, preserve and extend access to Current Anthropology.http://www.jstor.org This content downloaded from 130.58.65.20 on Tue, 28 Apr 2015 15:54:58 PMAll use subject to JSTOR Terms and Conditions 2010 by The Wenner-Gren Foundation for Anthropological Research. All rights reserved. 0011-3204/2010/5101-0016$10.00. DOI: 10.1086/649564Current Anthropology Volume 51, Number 1, February 2010 111Comment: Intergenerational Wealth Transmissionand Inequality in Premodern SocietiesInheritance and Inequality of WealthA CommentFrederic L. PryorDepartment of Economics, Swarthmore College, Swarthmore,Pennsylvania 19081, U.S.A. (fpryor1@swarthmore.edu). 23 IX 09The essays under review provide a model analysis of a sadlyneglected topic, the distribution of wealth and inheritance innonstate societies. They define three different types of wealth,measure the inequalities of holdings and inheritance arrange-ments within four groups of societies with the same economicsystems, and then analyze similarities and differences betweenthe four groups. This research procedure allows us to gain abroad perspective on the topic. The statistical methods em-ployed are sophisticated, and the exposition of the results isclear. Nevertheless, I am uncomfortable with the interpreta-tion of the statistical results, and the comments below presenta different perspective on these calculations.The Relationship between GiniCoefficients of Wealth andInheritance b’sThe b coefficient represents the percentage change of an off-spring’s wealth associated with a 1% change in the wealth ofhis or her parents. As noted in the introductory essay byBowles, Smith, and Borgerhoff Mulder (2010), rep-(1 b)resents a regression toward the mean; that is, in the very longrun, with other things remaining equal, wealth will be equallydistributed if b is less than unity, which is the case for everysociety in the sample. The lower the b is, the faster this equal-ity will be achieved. Other things equal, we have reason tosuspect, therefore, that lower b’s will be associated with lowerGini coefficients of wealth, a conjecture that can be easilytested with the data for the 44 societies.Unfortunately, the results of a regression analysis do notsupport this conjecture. More specifically, if we examine therelationship between the Gini coefficients (dependent vari-able) and b’s (independent variable) with an ordinary leastsquares regression, we find a negative but statistically insig-nificant relationship (.05 level) for the foraging (hunting andgathering) and horticultural societies, a positive but statisti-cally insignificant relationship for the pastoral societies, anda positive and statistically significant relationship only for theagricultural societies. These results are not changed if we addthe relative importance of the different types of food pro-duction activities (the a’s) or a dummy variable indicatingwhether the calculated b is statistically significant. If we ar-range the data according to the type of wealth (embodied,material, or relational) and rerun the regressions, we find anegative but statistically insignificant relationship between theGini coefficients and the b’s for embodied and relationalwealth and a positive but statistically insignificant relationshipfor material wealth. Adding to the regression, the a’s or adummy variable indicating whether the calculated b is sta-tistically significant also does not change the statistical insig-nificance of the results. So what is happening?Explanations of the DisappointingRegression ResultsTwo easy explanations for the disappointing regression resultscan be offered. (1) Several of the papers mentioned differentialshocks to individual wealth holdings—cattle are stolen or diefrom disease, climate changes nullify certain types of embod-ied wealth, or people die so that relational wealth evaporates.But, as conceded in the papers, no empirical evidence is avail-able to determine whether such shocks actually had any im-pact on the Gini coefficients of wealth holdings. (2) The bcoefficients are not a good measure of inheritance practicesand, moreover, cannot be accurately calculated: slightly morethan half are not statistically significant at the .05 level. Ifwealth is not equally inherited by a person’s children or ifparents with the same wealth have a different number ofchildren, then the ratios of a child’s wealth to that of his orThis content downloaded from 130.58.65.20 on Tue, 28 Apr 2015 15:54:58 PMAll use subject to JSTOR Terms and Conditions112 Current Anthropology Volume 51, Number 1, February 2010her parents can be greatly different for parents with the samewealth, and an average ratio or a ratio calculated through aregression technique may not tell us very much if we consideronly a few families. More specifically, in a society where eachset of parents has only two children and each child inheritsan equal share of the family’s wealth, the b may equal 1, whilein the same family situation with primogeniture, the averageb may equal 0.5 because one child inherits nothing. Withdifferent numbers of children per family, there may be a widevariation in the ratios of wealth of children to that of parents,and the meaningfulness of the b is open to doubt, especiallyin small samples. In the regression experiments describedabove, I included a dummy variable to see whether the lackof statistical significance of the b had any effect on the majorresults, but it did not. Such a test, however, does not ade-quately measure the bias of the wide variations of the ratiosof children’s wealth to parent’s wealth for parents in a givenwealth class. The inheritance rule, not the calculated b, is thekey variable to examine.Inheritance and Wealth Inequality:Alternative ExplanationsWhat are the major mechanisms linking the inequalities ofwealth and the calculated b’s? Three seem to be particularlyimportant and, in the various papers, are informally discussedbut not seriously analyzed.1. One crucial mechanism is demographic. In this regard,consider the following situation: a society starts with an initialdistribution of wealth among individuals, the adults marryaccording to certain rules (e.g., the degree of assortative mar-riage according to wealth), people earn income by labor andthe use of their wealth according to certain rules (e.g., laborincome varies according to some rule, the income receivedfrom wealth varies according to another rule, or there is acertain sharing or redistribution of income in the society),people save according to some rule, they have children ac-cording to their income (if they are wealthy, they have more—or fewer—children), they die and their wealth is redistributedaccording to certain rules (e.g., primogeniture, equal division,or some children receive more than others), and then theprocess then begins anew as the children marry. Althoughthis process cannot be easily modeled analytically, it can beeasily simulated by computer and run for many generations.The simulation results show that the distribution of wealthasymptotically approaches an equilibrium that depends onthe various societal rules specified in the model, which alsoinfluence the speed at which this equilibrium is achieved (sim-ulations discussed in Pryor 1973). In such a situation, thelong-term inequality of wealth may have little relationship tothe inequality of wealth in the first few periods of the process.Unfortunately, the papers in the special section focus onlyon the short term because the available data deal primarilywith only two adjacent generations and they did not discusschanges in inheritance arrangements or wealth inequalities inthe past. The b coefficient in the model is indirectly specifiedby the inheritance rule and its interaction with the other rules.Such a model provides a direct mechanism linking inheritancerules and wealth inequality, which the various papers in thespecial section discuss only in an informal manner.2. The wealth distribution is also influenced by nonde-mographic societal rules and institutions. In those societieswith slavery, wealth may be quite unequally distributed be-cause a certain segment of the society is not allowed to haveany (material) wealth. Inequalities may arise because of lim-ited access to certain resources necessary for food production,for example, fertile land for agriculture or foraging rights forparticular tracts of land, river bank rights for fishing, waterrights and pastures for cattle herding, and so forth. Severalof the papers discussed these influential societal rules inpassing.3. Finally, societies differ in the degree to which food andtools for food production are shared between family members,friends, or others, and this also has an important impact onthe distribution of wealth. Clearly, a family in a society withextensive sharing is less likely to experience a downward spiralof income and wealth if misfortune strikes, and this suggeststhat societies with more sharing should have more egalitarianwealth distributions. This conjecture can be tested in severalways.Some cross-cultural data from a large sample show thatboth reciprocal exchange and gift giving (one-way transfers),which represent a type of relational wealth, are more likelyto be found in foraging and horticultural societies than inpastoral and agricultural societies at higher levels of economicdevelopment (Pryor 1977, chaps. 7, 9). We would predict,therefore, that the differences in the Gini coefficients of dif-ferent types of wealth would be lower (more equal wealthdistribution) in the former than in the latter societies. Lookingat the Gini coefficients for the various types of capital forforaging and horticultural societies in comparison with thosefor pastoral and agricultural societies, I find that such a hy-pothesis is confirmed to a statistically significant degree. Con-fining ourselves to the individual types of capital, we see thatthe hypothesis is significantly confirmed for relational wealthbut not for embodied or material wealth.Final WordsDespite my reservations, I believe that the comparative ap-proach employed in these papers represents an important stepforward. Moreover, their focus on inheritance represents re-search on a topic that has, up to now, been shamefully ne-glected in the literature on economic anthropology. I can onlyThis content downloaded from 130.58.65.20 on Tue, 28 Apr 2015 15:54:58 PMAll use subject to JSTOR Terms and ConditionsPryor Comment 113hope that the leads provided in these papers serve to en-courage others to follow in their footsteps.References CitedBowles, Samuel, Eric Alden Smith, and Monique BorgerhoffMulder. 2010. The emergence and persistence of inequalityin premodern societies: introduction to the special section.Current Anthropology 51(1):7–17.Pryor, Frederic L. 1973. Simulation of the impact of socialand economic institutions on the size distribution of in-come and wealth. American Economic Review 63(1):50–72.———. 1977. The origins of the economy. New York: AcademicPress.This content downloaded from 130.58.65.20 on Tue, 28 Apr 2015 15:54:58 PMAll use subject to JSTOR Terms and Conditions

Inheritance And Inequality Of Wealth: A Comment

Swarthmore College 
Works 
Economics Faculty Works Economics 
2-1-2010 
Inheritance And Inequality Of Wealth: A Comment 
Frederic L. Pryor 
Swarthmore College, fpryor1@swarthmore.edu 
Follow this and additional works at: https://works.swarthmore.edu/fac-economics 
 Part of the Economics Commons 
Let us know how access to these works benefits you 
 
Recommended Citation 
Frederic L. Pryor. (2010). "Inheritance And Inequality Of Wealth: A Comment". Current Anthropology. 
Volume 51, Issue 1. 111-113. DOI: 10.1086/649564 
https://works.swarthmore.edu/fac-economics/121 
This work is brought to you for free by Swarthmore College Libraries' Works. It has been accepted for inclusion in 
Economics Faculty Works by an authorized administrator of Works. For more information, please contact 
myworks@swarthmore.edu. 
Inheritance and Inequality of Wealth: A Comment
Author(s): Frederic L. Pryor
Source: Current Anthropology, Vol. 51, No. 1 (February 2010), pp. 111-113
Published by: The University of Chicago Press on behalf of Wenner-Gren Foundation for
Anthropological Research
Stable URL: http://www.jstor.org/stable/10.1086/649564 .
Accessed: 28/04/2015 15:54
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp
 .
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.
 .
The University of Chicago Press and Wenner-Gren Foundation for Anthropological Research are collaborating
with JSTOR to digitize, preserve and extend access to Current Anthropology.
http://www.jstor.org 
This content downloaded from 130.58.65.20 on Tue, 28 Apr 2015 15:54:58 PM
All use subject to JSTOR Terms and Conditions
 2010 by The Wenner-Gren Foundation for Anthropological Research. All rights reserved. 0011-3204/2010/5101-0016$10.00. DOI: 10.1086/649564
Current Anthropology Volume 51, Number 1, February 2010 111
Comment: Intergenerational Wealth Transmission
and Inequality in Premodern Societies
Inheritance and Inequality of Wealth
A Comment
Frederic L. Pryor
Department of Economics, Swarthmore College, Swarthmore,
Pennsylvania 19081, U.S.A. (fpryor1@swarthmore.edu). 23 IX 09
The essays under review provide a model analysis of a sadly
neglected topic, the distribution of wealth and inheritance in
nonstate societies. They define three different types of wealth,
measure the inequalities of holdings and inheritance arrange-
ments within four groups of societies with the same economic
systems, and then analyze similarities and differences between
the four groups. This research procedure allows us to gain a
broad perspective on the topic. The statistical methods em-
ployed are sophisticated, and the exposition of the results is
clear. Nevertheless, I am uncomfortable with the interpreta-
tion of the statistical results, and the comments below present
a different perspective on these calculations.
The Relationship between Gini
Coefficients of Wealth and
Inheritance b’s
The b coefficient represents the percentage change of an off-
spring’s wealth associated with a 1% change in the wealth of
his or her parents. As noted in the introductory essay by
Bowles, Smith, and Borgerhoff Mulder (2010), rep-(1  b)
resents a regression toward the mean; that is, in the very long
run, with other things remaining equal, wealth will be equally
distributed if b is less than unity, which is the case for every
society in the sample. The lower the b is, the faster this equal-
ity will be achieved. Other things equal, we have reason to
suspect, therefore, that lower b’s will be associated with lower
Gini coefficients of wealth, a conjecture that can be easily
tested with the data for the 44 societies.
Unfortunately, the results of a regression analysis do not
support this conjecture. More specifically, if we examine the
relationship between the Gini coefficients (dependent vari-
able) and b’s (independent variable) with an ordinary least
squares regression, we find a negative but statistically insig-
nificant relationship (.05 level) for the foraging (hunting and
gathering) and horticultural societies, a positive but statisti-
cally insignificant relationship for the pastoral societies, and
a positive and statistically significant relationship only for the
agricultural societies. These results are not changed if we add
the relative importance of the different types of food pro-
duction activities (the a’s) or a dummy variable indicating
whether the calculated b is statistically significant. If we ar-
range the data according to the type of wealth (embodied,
material, or relational) and rerun the regressions, we find a
negative but statistically insignificant relationship between the
Gini coefficients and the b’s for embodied and relational
wealth and a positive but statistically insignificant relationship
for material wealth. Adding to the regression, the a’s or a
dummy variable indicating whether the calculated b is sta-
tistically significant also does not change the statistical insig-
nificance of the results. So what is happening?
Explanations of the Disappointing
Regression Results
Two easy explanations for the disappointing regression results
can be offered. (1) Several of the papers mentioned differential
shocks to individual wealth holdings—cattle are stolen or die
from disease, climate changes nullify certain types of embod-
ied wealth, or people die so that relational wealth evaporates.
But, as conceded in the papers, no empirical evidence is avail-
able to determine whether such shocks actually had any im-
pact on the Gini coefficients of wealth holdings. (2) The b
coefficients are not a good measure of inheritance practices
and, moreover, cannot be accurately calculated: slightly more
than half are not statistically significant at the .05 level. If
wealth is not equally inherited by a person’s children or if
parents with the same wealth have a different number of
children, then the ratios of a child’s wealth to that of his or
This content downloaded from 130.58.65.20 on Tue, 28 Apr 2015 15:54:58 PM
All use subject to JSTOR Terms and Conditions
112 Current Anthropology Volume 51, Number 1, February 2010
her parents can be greatly different for parents with the same
wealth, and an average ratio or a ratio calculated through a
regression technique may not tell us very much if we consider
only a few families. More specifically, in a society where each
set of parents has only two children and each child inherits
an equal share of the family’s wealth, the b may equal 1, while
in the same family situation with primogeniture, the average
b may equal 0.5 because one child inherits nothing. With
different numbers of children per family, there may be a wide
variation in the ratios of wealth of children to that of parents,
and the meaningfulness of the b is open to doubt, especially
in small samples. In the regression experiments described
above, I included a dummy variable to see whether the lack
of statistical significance of the b had any effect on the major
results, but it did not. Such a test, however, does not ade-
quately measure the bias of the wide variations of the ratios
of children’s wealth to parent’s wealth for parents in a given
wealth class. The inheritance rule, not the calculated b, is the
key variable to examine.
Inheritance and Wealth Inequality:
Alternative Explanations
What are the major mechanisms linking the inequalities of
wealth and the calculated b’s? Three seem to be particularly
important and, in the various papers, are informally discussed
but not seriously analyzed.
1. One crucial mechanism is demographic. In this regard,
consider the following situation: a society starts with an initial
distribution of wealth among individuals, the adults marry
according to certain rules (e.g., the degree of assortative mar-
riage according to wealth), people earn income by labor and
the use of their wealth according to certain rules (e.g., labor
income varies according to some rule, the income received
from wealth varies according to another rule, or there is a
certain sharing or redistribution of income in the society),
people save according to some rule, they have children ac-
cording to their income (if they are wealthy, they have more—
or fewer—children), they die and their wealth is redistributed
according to certain rules (e.g., primogeniture, equal division,
or some children receive more than others), and then the
process then begins anew as the children marry. Although
this process cannot be easily modeled analytically, it can be
easily simulated by computer and run for many generations.
The simulation results show that the distribution of wealth
asymptotically approaches an equilibrium that depends on
the various societal rules specified in the model, which also
influence the speed at which this equilibrium is achieved (sim-
ulations discussed in Pryor 1973). In such a situation, the
long-term inequality of wealth may have little relationship to
the inequality of wealth in the first few periods of the process.
Unfortunately, the papers in the special section focus only
on the short term because the available data deal primarily
with only two adjacent generations and they did not discuss
changes in inheritance arrangements or wealth inequalities in
the past. The b coefficient in the model is indirectly specified
by the inheritance rule and its interaction with the other rules.
Such a model provides a direct mechanism linking inheritance
rules and wealth inequality, which the various papers in the
special section discuss only in an informal manner.
2. The wealth distribution is also influenced by nonde-
mographic societal rules and institutions. In those societies
with slavery, wealth may be quite unequally distributed be-
cause a certain segment of the society is not allowed to have
any (material) wealth. Inequalities may arise because of lim-
ited access to certain resources necessary for food production,
for example, fertile land for agriculture or foraging rights for
particular tracts of land, river bank rights for fishing, water
rights and pastures for cattle herding, and so forth. Several
of the papers discussed these influential societal rules in
passing.
3. Finally, societies differ in the degree to which food and
tools for food production are shared between family members,
friends, or others, and this also has an important impact on
the distribution of wealth. Clearly, a family in a society with
extensive sharing is less likely to experience a downward spiral
of income and wealth if misfortune strikes, and this suggests
that societies with more sharing should have more egalitarian
wealth distributions. This conjecture can be tested in several
ways.
Some cross-cultural data from a large sample show that
both reciprocal exchange and gift giving (one-way transfers),
which represent a type of relational wealth, are more likely
to be found in foraging and horticultural societies than in
pastoral and agricultural societies at higher levels of economic
development (Pryor 1977, chaps. 7, 9). We would predict,
therefore, that the differences in the Gini coefficients of dif-
ferent types of wealth would be lower (more equal wealth
distribution) in the former than in the latter societies. Looking
at the Gini coefficients for the various types of capital for
foraging and horticultural societies in comparison with those
for pastoral and agricultural societies, I find that such a hy-
pothesis is confirmed to a statistically significant degree. Con-
fining ourselves to the individual types of capital, we see that
the hypothesis is significantly confirmed for relational wealth
but not for embodied or material wealth.
Final Words
Despite my reservations, I believe that the comparative ap-
proach employed in these papers represents an important step
forward. Moreover, their focus on inheritance represents re-
search on a topic that has, up to now, been shamefully ne-
glected in the literature on economic anthropology. I can only
This content downloaded from 130.58.65.20 on Tue, 28 Apr 2015 15:54:58 PM
All use subject to JSTOR Terms and Conditions
Pryor Comment 113
hope that the leads provided in these papers serve to en-
courage others to follow in their footsteps.
References Cited
Bowles, Samuel, Eric Alden Smith, and Monique Borgerhoff
Mulder. 2010. The emergence and persistence of inequality
in premodern societies: introduction to the special section.
Current Anthropology 51(1):7–17.
Pryor, Frederic L. 1973. Simulation of the impact of social
and economic institutions on the size distribution of in-
come and wealth. American Economic Review 63(1):50–72.
———. 1977. The origins of the economy. New York: Academic
Press.
This content downloaded from 130.58.65.20 on Tue, 28 Apr 2015 15:54:58 PM
All use subject to JSTOR Terms and Conditions


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