Want to rail against the Global 1% rich-listers? Be a bit careful: if you own a house in Auckland, mortgage-free, you could easily be on that list. And roughly half the country is in the global top 10%. But, either way, the numbers miss some of the most important parts of Kiwis’ real wealth.

Oxfam’s annual global wealth inequality figures came out last week. Every year, Oxfam repackages Credit Suisse’s annual report on global wealth figures into a more outrage-friendly format. This year was no different.

The Credit Suisse reports do a decent job of pulling together statistics held in different formats, all over the world, and trying to make them comparable. Their household wealth figures count individuals’ assets, including housing and any stock portfolios, and net against those figures any household debt. They then provide Gini indices of wealth dispersion within countries.

The Oxfam figures pick up from there by identifying a small number of high net worth individuals in each country, adding up their wealth, and then checking to see how many of the least wealthy households’ assets would equate to the holdings of the rich-listers in selected countries. The framing suggests that the poor are poor because the rich are rich, and that policies targeting the rich are the best way of helping the poor. And it ignores the massive drop in worldwide poverty since 1980.

The framing hardly helps us to understand what’s going on in the world.

To begin with, the measure of household wealth gives a very poor picture of households’ real asset stance.

Consider two countries. In the first country, everyone has a private retirement account. A part of your taxes are shunted into it each year, with top-ups from the government if your income is too low. The portfolio is designed to give you an annual income equal to a reasonable fraction of the country’s average personal income when you hit age 65. If you live in that country, the value of your retirement account will count towards your personal wealth. By contrast, if you live in a country like New Zealand, where the public retirement system does the same thing without routing things through personal accounts, your NZ Super asset does not count in the personal wealth balance sheets.

This automatically makes wealth look far more unequal in New Zealand: the main retirement asset for the country’s poorer households does not get counted toward their wealth, while richer households’ Kiwisaver accounts and houses will count in their favour.

Countries using private medical savings accounts, with government-funded top-ups, to provide health care will count as having wealthier citizens than those relying on public health systems, even if the experienced outcomes for those using health services are identical in both places.

Consequently, as the University of British Columbia’s Professor of Economics Kevin Milligan put it, “any measure of wealth that ignores the future consumption value from public programs is a fairly useless measure of wealth.”

Consider too that human capital – your education, and the higher income it will bring over the course of your lifetime – does not count towards your wealth in these kinds of figures. But the student loan you used to finance that education will count against any assets you do hold. To slightly paraphrase another Canadian economics professor, Université Laval’s Stephen Gordon, if you’re using wealth as a measure of inequality, the exercise is pointless if you’re ignoring human capital. Auckland University’s Professor of Statistics Thomas Lumley raised similar concerns with this method. The method implies that a new graduate doctor, with a student loan, is poorer than a homeless person who has no debt and some change in his pocket. It is nonsense.

Finally, different countries have different age profiles. Countries with a lot of people just moving into retirement will have a large number of people right at the peak of their financial wealth. You save and pay off student and mortgage debt during your working career to build up some assets for a more comfortable retirement, then draw on that wealth during retirement. Measures of national wealth inequality that do not adjust for national differences in age profiles will make a bit of a hash of things. Countries with a more dispersed age profile will then have greater measured wealth inequality.

For all of these reasons, inequality in wealth as measured by figures like Oxfam’s give a very poor indication of experienced inequality. But even taking that into account, New Zealand’s wealth inequality figures are decidedly middling by international standards. New Zealand’s top 1% own a bit less than twenty percent of net national wealth, which is entirely on par with the OECD average.

For a better measure, we should look towards inequality in household consumption. Income changes naturally over an individual’s life-cycle. People save during periods of relatively high earnings, and borrow during periods of relatively low earnings. Consumption then is more stable than income for any household. And consumption measures also reflect household wealth: wealthier households will be able to sustain higher ongoing levels of consumption because wealth provides a buffer against periods of lower income.

The best measure of household consumption inequality in New Zealand comes from work by Chris Ball and John Creedy. It shows household consumption inequality rose a bit in the late 1980s, but subsequently fell and, by 2010, was below the figures from the early 1980s.

The better take on the Credit Suisse figures is that New Zealand is an extraordinarily wealthy country. Credit Suisse said New Zealand placed second only to Switzerland, although that high placement is in part due to New Zealand’s house price appreciation and should be taken with a grain of salt.

Anyone in New Zealand with net assets of around $100,000, including the equity in your home, is in the global top 10%; anyone with net assets of just over a million dollars – the value of the average Auckland home – is in the global top 1%. Over 270,000 Kiwis count in the global top 1%, without even considering New Zealanders’ high levels of education or the value of the entitlements like superannuation and health services provided by the government.

So be careful in railing against the global top ten-percent or top one-percent. You may well be a part of it.