Stop Acting Rich: . . . And Start Living Like a Real Millionaire

Appendix A. The Nationwide Search for Millionaires

For each of the 208,790 Census Block Groups/neighborhoods in the United States, an estimate of the incidence of millionaire households was made. "Millionaire households" were defined in terms of the net value of investments. The proportion of millionaire households in each neighborhood was estimated by adjusting unearned income for underreporting, capitalizing it with a rational rate of real return, and estimating net worth through a nonlinear fit to a Lorenz curve expressing the proportion of net worth attributable to the sources measured by the Census as a function of the size of unearned income (dividends, interest, net rental income, royalty income, etc.). The empirical basis for the model is derived from the Survey of Consumer Finance (Federal Reserve) and its wealth over sample. Internal Revenue Service Statistics of Income series and studies provide the basis for estimating the real rate of return.

Using this methodology, a rank ordering was generated of all 208,790 neighborhoods in descending sequence of the incidence of millionaire households. This step permitted a specific selection of the highest incidence areas for identifying a sample of households within them as prospective survey respondents with a high likelihood of being millionaires, as defined above.

Potential respondents were selected randomly from neighborhoods nationwide that had a high estimated incidence of millionaires.^[81] Commercial list organizations were ...