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Empirical Economics

Erschienen in:

01.03.2021

Are survey data underestimating the inequality of wealth?

verfasst von: Jaanika Meriküll, Tairi Rõõm

Erschienen in: Empirical Economics | Ausgabe 2/2022

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Abstract

This paper studies households’ response behaviour in a wealth survey. We analyse how unit non-response and item non-response contribute to the estimated distribution of wealth. Our findings imply that wealth inequality is underestimated in the survey. The downward bias is originating from item non-response and not from unit non-response. Wealthier households are less likely to provide answers to wealth-related questions. As a result, the level of net wealth is underestimated and the top tail of its distribution is missing. Imputation can eliminate biases throughout most of the wealth distribution but does not recover the estimates in the top tail.

Vorheriger Artikel Natural resources and income inequality in developed countries: synthetic control method evidence

Nächster Artikel On the long-run dynamics of income and wealth inequality

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Examples of wealth surveys are the Bank of Italy’s SHIW survey, the Federal Reserve Board’s SCF, the Bank of Spain’s EFF and the ECB’s HFCS.

There are actually only four income components that need to be imputed, because one of the income components, private pensions, had no missing observations. See “Appendix 1” Table 2 for the related statistics.

The following description of methods proceeds from the description of the commands “mi impute chained” and “mi impute pmm” in the Stata manual.

As imputed values are drawn from the observed data, this method also preserves the distribution of the observed data. We have tested alternative imputation methods such as the linear regression, but this gives a very similar distribution of the imputed data to that from predictive mean matching.

This weak link between net wealth and unit response is not caused by controlling for income deciles in the regressions, as the link is still weak when the income deciles are excluded from the regression.

The Estonian HFCS aims at oversampling the richest households. The oversampling is based on personal incomes of the survey contact people in the period prior to the survey (the income data are obtained from the registers). To test the sensitivity of our estimates to oversampling, we re-estimated the results shown in Tables 2 and 4 removing the oversampled contact persons randomly. This had no significant effect on the estimation results, and therefore the estimates based on this exercise are not reported.

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Titel: Are survey data underestimating the inequality of wealth?
verfasst von: Jaanika Meriküll
Tairi Rõõm
Publikationsdatum: 01.03.2021
Verlag: Springer Berlin Heidelberg
Erschienen in: Empirical Economics / Ausgabe 2/2022
Print ISSN: 0377-7332
Elektronische ISSN: 1435-8921
DOI: https://doi.org/10.1007/s00181-021-02030-6

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