Stats › Long run returns › Dividends in total return
Dividends are 48 per cent of the compounded equity return and a twelfth of its volatility
| Component | Arithmetic 1870 to 2015 | Standard deviation | Geometric | After 1950, arithmetic |
|---|---|---|---|---|
| Equity capital gain | 6.62% | 22.17 | 4.46% | 9.17% |
| Equity dividend income | 4.18% | 1.80 | 4.16% | 3.81% |
| Equity total return | 10.81% | 22.67 | 8.63% | 13.00% |
| Capital gain share of the total | 61% | - | 52% | 71% |
| Housing capital gain | 5.72% | 10.42 | 5.25% | 7.22% |
| Housing rental income | 5.49% | 2.02 | 5.47% | 5.26% |
| Housing capital gain share | 51% | - | 49% | 58% |
Nominal returns across sixteen countries, equally weighted, 1,675 observations in the full sample and 985 after 1950. The paper reports standard deviations and no standard errors. The capital gain share is published and the income share is its complement, so dividends are 39 per cent of the arithmetic total return and 48 per cent of the geometric one over the full sample.
Across sixteen countries since 1870, dividend income contributes 4.18 per cent a year against 6.62 from capital gains. The standard deviation of that income is 1.80 against 22.17 for the price change, a ratio of about twelve to one.
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