Bounds for timely estimates of average household income

Domenico Depalo and David Loschiavo

No 1008, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper proposes a novel set identification approach to produce timely estimates of average household income that are robust to the sample selection bias driven by item non-response, which may affect surveys. Our method covers a large number of practical situations and considers several, increasingly restrictive assumptions. Extensions to other functionals beyond average income are possible. As a practical example, we use data from Banca d'Italia's Household Outlook Survey. Starting from wide nonparametric bounds based solely on brackets, we progressively narrow the identified set by exploiting additional information: unfolding brackets, exact income responses, and monotonicity assumptions leveraging the panel and cross-sectional dimensions of the data. Our method identifies bounds that contain the official EU-SILC estimate of average Italian household income and are available almost one year earlier than the EU-SILC release. The economically plausible assumptions we impose narrow the initial bounds by 25%. The method is simple, transparent, and broadly applicable to other contexts where timely, unbiased income measures are needed.

Keywords: set identification; partial identification; household income; income brackets; timely statistics; sample selection bias (search for similar items in EconPapers)
JEL-codes: C14 C83 D31 I32 (search for similar items in EconPapers)
Date: 2026-04
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_1008_26

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