Estimation of Small Business Wealth
Contract # SBA-HQ-00-M-0715
Final Report
Submitted to:
U.S. Small Business Administration
By
Joel Popkin and Company
1155 15th Street NW, Suite 614
Washington, DC 20005
(202) 872-0990
September 12, 2002
"The findings and recommendations stated in this report are those of the authors and do not necessarily
represent the positions and policies of the U.S. Small Business Administration."
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TABLE OF CONTENTS
Table of Contents…………………………………………………………………. 2
List of Tables and Charts…………………………………………………………. 3
Executive Summary………………………………………………………………. 4
Section I - Introduction…………………………………………………………… 6
Section II - Methodological Approach…………………………………………… 10
FOF Data…………………………………………………………………. 13
GPO Data………………………………………………………………… 14
Profits Taxation……………………………………………………..……. 16
Time-Frame………………………………………………………………. 16
Capitalization Issues……………………………………………………… 16
Stock Index Family Selection…………………………………………….. 17
P/E Ratio Observation Date………………………………………………. 23
FOF Observation Date……………………………………………………. 26
Corporate Wealth Aggregation……………...……………………………. 26
Noncorporate Wealth ……………………………………………………. 31
Section III - Results……………………………………………………………… 33
Section IV – Implication of the Results for Further Research…………………… 34
Appendix A – Data………………………………………………………………. 37
Appendix B – Stock Index Families’ Sub-Indexes by Business Size……….…… 42
Bibliography……………………………………………………………………… 45
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LIST OF TABLES AND CHARTS
Table A
Estimates of Business Wealth by Firm Size……………………… 5
Table 1
Methodology for Estimating Corporate Business Wealth by
Firm Size by Capitalizing Earnings………………………………. 12
Table 2
Comparison of Russell, Wilshire, and S&P-based Estimated
Market Capitalization of Small and Large Corporations with
Federal Reserve’s Flow of Funds Data ……………………….…. 22
Table 3
Comparison of Russell, Wilshire, and S&P-based Estimated
Market Capitalization of Small and Large Corporations with
Federal Reserve’s Flow of Funds Data, End-of-Year and Mid-Year 25
Table 4
Comparison of