Where Do World's Billionaires Live?
We, of course, know that the world's super-rich produce much of its wealth. But, they have more in common. The world's wealthy also cluster together in some of the best cities. According to Martin Prosperity Institute, two-thirds of the billionaires worldwide, live in the top 50 metropolises. (The top metropolises are ranked according to the number of billionaires who live in these cities.) These top 50 metropolises, however, house only a mere seven per cent of the world's population.
Nearly 40 per cent of the world's wealthy live in the top 20 metropolises, while only 3.5 per cent of the world's population live in these cities. But if you look at the upper tail, you will see that the concentration of wealth is even more intense. 36 per cent of the world's wealthy live in the top 10 metros. Five of the top 10 metros, and nine of the top 20 metros are in the United States.
New York has 116 billionaires while the city houses 6.4 per cent of the world's billionaires, and 7.6 per cent of the global billionaire wealth. San Francisco Bay Area has 71 billionaires, which is about 3.9 per cent of the world's total number of billionaires. Moscow stands third with 68 billionaires closely followed by Hong Kong with 64 billionaires, and then Los Angeles with 51 billionaires.
Interestingly, London is at sixth place, with 50 billionaires. Only 2.7 per cent of the world's billionaires live in London. This is less than half of that of the number in New York.
The only Indian city that features in the top 20 cities list is Mumbai at the eighth position with 33 billionaires. Of the total, 1.8 per cent of the world's billionaires are in Mumbai and have a total wealth of about $139 billion. This only two per cent of the world's billionaire wealth.
Looking at the numbers, it is hard to overlook the fact that the gap between the haves and have-nots is the highest in developing countries including India. The gap was most pronounced in Indian cities like Bengaluru, Mumbai, and Delhi. This is true of cities of other developing countries, too. These cities include Mexico City, Manila, Jakarta, Bangkok, Hangzhou, Beijing, Shanghai, Rio de Janeiro, Sao Paulo, and Santiago. However, there was a noticeable gap in the income of billionaires and average persons in prosperous cities like Seattle, Dallas, Paris, Stockholm, Toronto, and Tokyo, too.
In Mumbai, the ratio of the wealth of the super rich to the total output of the city was 0.92 per cent in 2015, and this is the second highest in the world. In Geneva, the ratio was 1.53. Bengaluru, where the ratio was 0.72, was at the fourth place.
So, why is it that the world's billionaires are concentrated only in a few cities? This is not merely because some cities are more populated. In Geneva, Singapore, San Francisco, Hong Kong, Moscow, and New York, there are far more billionaires than in comparably populated cities. In some cities like Osaka-Kobe, Tianjin, and Bogota, there are far less billionaires than in comparably populated cities.
One fact, which is clear, is that the billionaires tend to live in cities which are highly productive. Billionaires migrate to such cities, partly because many of them were born in such cities, and partly because billionaires make cities more productive. Billionaires are more likely to flock to more productive cities, because productive economies are larger. Markets are larger in larger economies, and markets cater to a more diverse group of customers.
Even though many urban policy thinkers believe that dense cities are more prosperous, and attract more prosperous individuals, there is only a moderate link between density and concentration of billionaires. The correlation is too small to be statistically significant. However, billionaires prefer to live in cities which have more people, and have large economies. This means that economic strength and population of cities matter to billionaires. But, they do not have a strong preference for densely populated cities.
One of the most striking fact about Indian cities is that the average income in Mumbai, Kolkata, Hyderabad and Bengaluru is high. But these cities have more billionaires, when compares to much wealthier cities. The researchers who did the study do not say much, but this could be because of huge variance in talent, within Indian cities.