Wealth: Factors That Effect African American Wealth

Abstract

As accumulating wealth is a vital component of financial well-being, this paper aims to gain a better understanding of why African Americans do not accumulate wealth at the same rate as other racial groups. Researchers utilize data from the 2019 Survey of Consumer Finances (SCF) to estimate the parameters of logistic regression specifications to examine the factors that determine wealth accumulation for African Americans. Researchers found that African Americans were less likely to have low wealth if they owned their own homes and more likely to have low wealth if they did not save. Saving and homeownership had more of an impact on wealth accumulation for African Americans than for White Americans. Furthermore, African Americans who did not invest in the stock market were more likely to have low wealth, as investing also had more of an effect on wealth accumulation for White Americans than for African Americans.