Beyond income: A new framework for predicting wealth-based inequality using real estate price dispersion

Abstract

Research background: Traditional socio-economic indicators, such as the Gini coefficient, may suffer from significant data lags and fail to capture the long-term dynamics of capital accumulation and wealth-based inequality. Furthermore, real estate forecasting predominantly focuses on predicting price levels rather than price dispersion, typically relying on ex post accuracy assessments that cannot account for unexpected future market disruptions. Purpose of the article: This study introduces a novel methodological framework to predict wealth-based inequality by leveraging real estate price dispersion as a timely proxy for economic welfare. The primary novelty of the approach lies in: (a) the construction of a Regional Inequality and Volatility (RIV) vector, which simultaneously tracks relative stratification and absolute financial barriers; (b) the development of a parametric bootstrap procedure for ex ante prediction assessment; (c) the implementation of stochastic, unexpected shock simulations (green policy, regulatory, macroeconomic, and climate events) to evaluate model robustness beyond historical data. Methods: The framework is applied to a longitudinal dataset of U.S. prefabricated housing transactions (2015–2023) using log-linear Mixed Models and plug-in predictors. This segment is chosen for its critical role in affordable homeownership. Findings & value added: The analysis reveals a significant structural shift toward ‘wealth exclusion’, where surging absolute costs create an economic blockade for lower-income households even when relative inequality appears stable. A critical implication is the identification of 'blind spots' in official metrics. For instance, the study uncovers a 'paradox of prosperity' where economic growth may reduce income-based poverty while intensifying wealth-based exclusion due to rising price volatility. These results suggest that a comprehensive policy framework must monitor both income and asset-based indicators to fully address socioeconomic polarization and the broken ladder of wealth accumulation.