This appendix presents the sources and methods used to derive the time series that were developed especially for this study.
The concept of household net worth used in this study is broader than many but narrower than some.68. It includes the market value of land other than farmland and the replacement cost of nonfarm structures, as well as the market value of corporate equities. All other financial assets are entered at face value from the flow-of-funds tabulations, so that the resulting estimate of net worth does not depend directly on interest rates. The concept excludes the replacement cost of the net stock of consumer durables (now available from the Bureau of Economic Analysis) and consumer and installment credit attributed to such assets (around 27 percent of the total financial liabilities of the household sector and 30 percent of the monetary interest paid by it). This was done to maintain consistency with the national income and product accounts and to avoid having to impute a net rate of return on these leveraged consumer assets. To eliminate the cyclical element, the ratio of net worth to disposable income was multiplied by a cyclical adjustment factor derived from a regression of the log of the net worth ratio on the log of the ratio of actual to potential GNP in 1972 dollars.69 The adjusted ratios are shown in table 10, column 7.
Net social insurance wealth includes not only the net assets of the old____________________