Título:
Underreporting of Top Incomes and Inequality: A Comparison of Correction Methods using Simulations and Linked Survey and Tax Data
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Autor:
Flachaire, Emmanuel
Lustig, Nora
Vigorito, Andrea
Lustig, Nora
Vigorito, Andrea
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Tipo de documento:
Artículo
Editor:
Palabras clave:
Correction methods
Tax records
Household surveys
Income underreporting
Inequality
Linked data
Replacing
Reweighting
Tax records
Household surveys
Income underreporting
Inequality
Linked data
Replacing
Reweighting
Descriptores:
INGRESOS
Año de publicación:
2023
Contenido:
Resumen:
Household surveys do not capture incomes at the top of the distribution well. This yields biased inequality measures. We compare the performance of the reweighting and replacing methods to address top incomes underreporting in surveys using information from tax records. The biggest challenge is that the true threshold above which underreporting occurs is unknown. Relying on simulation, we construct a hypothetical true distribution and a “distorted” distribution that mimics an underreporting pattern found in a novel linked data for Uruguay. Our simulations show that if one chooses a threshold that is not close to the true one, corrected inequality measures may be significantly biased. Interestingly, the bias using the replacing method is less sensitive to the choice of threshold. We approach the threshold selection challenge in practice using the Uruguayan linked data. Our findings are analogous to the simulation exercise. These results, however, should not be considered a general assessment of the two methods.
Descripción:
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Editorial:
Wiley
EN:
Review of Income and Wealth, vol 69, n° 4, pp. 1033-1059
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Citación:
FLACHAIRE, Emmanuel, LUSTIG, Nora y VIGORITO, Andrea. Underreporting of Top Incomes and Inequality: A Comparison of Correction Methods using Simulations and Linked Survey and Tax Data. Review of Income and Wealth, 2023, vol 69, n° 4, pp. 1033-1059. https://doi.org/10.1111/roiw.12618
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Licencia:
Licencia Creative Commons Atribución (CC - By 4.0)
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| Ficheros | Descripción | Tamaño | Formato | ||
|---|---|---|---|---|---|
| 10.111.pdf | Artículo principal | 1.73 MB | Adobe PDF |