Wealth Map: new data shows that Brasilia has highest income in Brazil

Where do the richest people live in Brazil? How has the pandemic affected overall inequality and the geographic distribution of the nation’s wealth? What is Brazil’s real level of inequality if we take into account the top of the income distribution, which only income tax returns allow us to estimate? These are some of the questions that were answered by a new study carried out by FGV Social, called Wealth Map.

Income inequality in Brazil is even greater than previously imagined. This is the main conclusion drawn from comparing the personal income tax database with figures from the Continuous National Household Sampling Survey (PNADC). According to income tax data, the Gini index was 0.7068 in 2020, well above the 0.6013 calculated by PNADC. Contrary to popular belief, the massive emergency welfare provided during the pandemic did not reduce Brazil’s level of inequality. Based on the traditional approach, the Gini index would have fallen from 0.6117 to 0.6013, whereas by incorporating data from income tax returns, it was found that the Gini index actually rose slightly, from 0.7066 to 0.7068. This is because the richest 1% of people experienced a 1.5% reduction in income, but middle-class people saw a 4.2% slump in income, making them the biggest losers in the pandemic.

Another objective of the study was to map the income flows and asset stocks of the richest Brazilians, based on the latest available income tax data. This type of analysis is useful for designing reforms to income and wealth tax policies. “We can think of the criteria for income tax declarations as a line of wealth that allows us to identify the country’s residents with the greatest purchasing power,” says FGV Social’s Marcelo Neri.

States and Federal District:

1stFederal District
2ndSao Paulo
3rdRio de Janeiro

Wealth:

The Brazilian state with the lowest declared assets per inhabitant is Maranhão (R$6,300). At the other end of the scale is the Federal District, where average declared assets per person are R$95,000. Within the Federal District, there is significant wealth inequality. For example, in the administration region of Lago Sul, per capita wealth is R$1.4 million and per capita monthly income is R$23,241 – three times higher than the richest municipality in Brazil, Nova Lima in Greater Belo Horizonte (R$8,897).

You can read the full study here.

You can also read this article about the Poverty Map published in FGV News.