Measuring wealth mobility

Andrea Neri

No 703, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: In the economic literature on mobility measurement issues are generally disregarded. The aim of the paper is to assess their impact on the analysis of Italian households' mobility across the wealth distribution in the 1989-2004 period. The paper shows that response (or measurement) errors and transitory shocks may account up to 30-50 per cent of the observed mobility (depending on the index used). Moreover, also the dynamics of mobility is likely to be biased by the dynamics of response (or measurement) errors. In the case of Italy, the declining level of observed mobility is downward biased by the increasing difficulty in measuring household wealth (which results in an increase of response errors). Measurement issues appear to be more important than socio-demographic characteristics to explain mobility.

Keywords: wealth mobility; attrition; response error; latent class analysis (search for similar items in EconPapers)
JEL-codes: C33 D3 P46 (search for similar items in EconPapers)
Date: 2009-01
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_703_09

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