³Of course, ‘permanent income’ is not directly observed in the SCF. However, the survey does ask consumers whether their income over the last year was usually high, usually low, or about normal. The figure shows the median of the ratio of wealth to actual income for the set of consumers who reported that their income was about normal. Kennickell 1995 argues that this question appears to provide a very effective way of identifying households who have recently experienced transitory shocks to income. I excluded SCF households who report ever having received an inheritance, so the difference in the SCF and HSZ models cannot be due to inheritances.