Net Worth
Net worth is the most common way to measure wealth. It is calculated by subtracting the value of household debt from the value of household assets.
Wealth and Net Worth
Prosperity Now’s analysis measures wealth through net worth. A complex interplay of assets, debts, income, and expenses affects household net worth, with each of these contributors influenced by its unique set of underlying drivers.
On this page, after picturing the state of the racial differences in net worth, we examine the underlying drivers of these inequalities.
There are stark differences in median net worth between ethno-racial groups in Michigan
When comparing households with similar income, the net worth gap shrinks
When comparing households with similar home equity, the differences in median net worth are quite small
The squares below represent median net worth when comparing households with similar demographics, income, and unsecured debt (i.e., any debt that isn't tied to an asset like a car or home). When we compare households with similar unsecured debt (and similar demographics and income), Black and other households have a median net worth that is closer to white households’. For example, when comparing households with similar debt, demographics, and income, Black households have about $59,000 less net worth than white households. When debt, income, and demographics are not taken into consideration that gap is around $171,000. However, the confidence intervals are quite wide meaning there is a lot of uncertainty.