<p>The reference is <a href="http://documents.worldbank.org/curated/en/287171468323724180/Where-is-the-wealth-of-nations-measuring-capital-for-the-21st-century" rel="nofollow noreferrer">World Bank (2006)</a>. You can see the detail of the methodology in Appendix 1, and their estimates of intangible wealth in Appendix 2. </p>

<p>There are other methodologies to measure intangible wealth (e.g. <a href="http://www.panoeconomicus.rs/casopis/2014_3/01%20Jose%20Luis%20Alfaro%20Navarro,%20Victor%20Raul%20Lopez%20Ruiz%20and%20Domingo%20Nevado%20Pena.pdf" rel="nofollow noreferrer">here</a> and <a href="http://documents.worldbank.org/curated/en/622091468153550529/pdf/wps6391.pdf" rel="nofollow noreferrer">here</a>). Alternatively, there are many ways to compute natural and physical capital, which will give different results to the one given by the WB, even if using the same formula to compute intangible capital. For example, see <a href="https://unu.edu/projects/inclusive-wealth-report.html" rel="nofollow noreferrer">here</a>. If you search in google or <a href="http://econpapers.repec.org/" rel="nofollow noreferrer">here</a> things like "measuring capital stock", you get tons of hits too. </p>

<p>I think that because this is a relatively new research area, there is no "official" guideline about how to measure intangible wealth. Maybe in the future some sort of standard will be produces, pretty much like the standard for GDP came to be (which is still subject to criticism anyway).</p>

CC BY-SA 3.0
2017-06-29T13:05:12.847Z
2017-06-29T13:05:12.847Z
luchonacho
<p>I seem to recall reading about the following research regarding "national intangible wealth" (IIRC):</p>

<ol>
<li>For each country, compute the <a href="https://en.wikipedia.org/wiki/Gross_domestic_product" rel="nofollow noreferrer">GDP</a>.</li>
<li>Convert the GDP to "total national capital" using <em>an</em> interest rate (e.g., assuming 5% interest, the total national capital of a country with GDP=\$5B will be \$100B), the same(?) interest for all countries.</li>
<li>Subtract from the above total national capital all the tangible capital: industry, farms, infrastructure, education of the population - everything you can put a price tag on.</li>
<li>The result is the "intangible national capital" - stable non-corrupt government, courts that enforce contracts, work ethics...</li>
</ol>

<p>I tried to google things like "national intangible wealth" &amp;c, but found nothing reminiscent of the above approach.</p>

<p>Could you please provide a reference? Criticism of the methodology?</p>

<purchasing-power-partity><wealth><national-income>
Estimating national intangible wealth
sds
# Estimating national intangible wealth

(Asked by: username_0 on 2017-06-28)

I seem to recall reading about the following research regarding "national intangible wealth" (IIRC):

1. For each country, compute the [GDP](https://en.wikipedia.org/wiki/Gross_domestic_product).
2. Convert the GDP to "total national capital" using *an* interest rate (e.g., assuming 5% interest, the total national capital of a country with GDP=\$5B will be \$100B), the same(?) interest for all countries.
3. Subtract from the above total national capital all the tangible capital: industry, farms, infrastructure, education of the population - everything you can put a price tag on.
4. The result is the "intangible national capital" - stable non-corrupt government, courts that enforce contracts, work ethics...

I tried to google things like "national intangible wealth" &c, but found nothing reminiscent of the above approach.

Could you please provide a reference? Criticism of the methodology?

**Tags:** purchasing-power-partity, wealth, national-income


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## 1 answers

### Answer by username_1 on 2017-06-29. Score: 2 | Accepted answer

The reference is [World Bank (2006)](http://documents.worldbank.org/curated/en/287171468323724180/Where-is-the-wealth-of-nations-measuring-capital-for-the-21st-century). You can see the detail of the methodology in Appendix 1, and their estimates of intangible wealth in Appendix 2.

There are other methodologies to measure intangible wealth (e.g. [here](http://www.panoeconomicus.rs/casopis/2014_3/01%20Jose%20Luis%20Alfaro%20Navarro,%20Victor%20Raul%20Lopez%20Ruiz%20and%20Domingo%20Nevado%20Pena.pdf) and [here](http://documents.worldbank.org/curated/en/622091468153550529/pdf/wps6391.pdf)). Alternatively, there are many ways to compute natural and physical capital, which will give different results to the one given by the WB, even if using the same formula to compute intangible capital. For example, see [here](https://unu.edu/projects/inclusive-wealth-report.html). If you search in google or [here](http://econpapers.repec.org/) things like "measuring capital stock", you get tons of hits too.

I think that because this is a relatively new research area, there is no "official" guideline about how to measure intangible wealth. Maybe in the future some sort of standard will be produces, pretty much like the standard for GDP came to be (which is still subject to criticism anyway).


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