The weight of the rich: improving surveys using tax data

Thomas Blanchet, Ignacio Flores and Marc Morgan ()
Additional contact information
Marc Morgan: Paris School of Economics

The Journal of Economic Inequality, 2022, vol. 20, issue 1, No 6, 119-150

Abstract: Abstract Household surveys often fail to capture the top tail of income and wealth distributions, as evidenced by studies based on tax data. Yet to date there is no consensus on how to best reconcile both sources of information, given the multiple biases at play. This paper contributes a novel method, rooted in standard calibration theory, to directly confront the problem of survey non-response between survey micro-data and anonymous tax data under reasonable assumptions. Our key innovation is to endogenously determine a “merging point” between the datasets, above which we start to incorporate information from tax data into the survey, under the assumption that the rate of representativeness is constant, then decreasing with income. This is followed by a “reweighting” and a “replacing” step, which preserves the microdata structure of the original survey, assuming no re-ranking of observations. We illustrate our approach with simulations, which show that our method is robust to the existence of income misreporting, and performs better than alternative methods. We also apply it to real data from five countries, both developed and less developed, finding changes to the levels and trends in income inequality. We discuss several limits to our approach and suggest some guidelines for future research.

Keywords: Calibration; Inequality; Reweighting; Survey representativeness; Tax data (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (43)

Downloads: (external link)
http://link.springer.com/10.1007/s10888-021-09509-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Working Paper: The Weight of the Rich: Improving Surveys Using Tax Data (2018)
Working Paper: The Weight of the Rich: Improving Surveys Using Tax Data (2018)
Working Paper: The Weight of the Rich: Improving Surveys Using Tax Data (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:joecin:v:20:y:2022:i:1:d:10.1007_s10888-021-09509-3

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10888

DOI: 10.1007/s10888-021-09509-3

Access Statistics for this article

The Journal of Economic Inequality is currently edited by Stephen Jenkins

More articles in The Journal of Economic Inequality from Springer, Society for the Study of Economic Inequality Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().