Survey Under-Coverage of Top Incomes and Estimation of Inequality: What Is the Role of the UKâ€™s SPI Adjustment?
Richard Burkhauser (),
Nicolas HÃ©rault (),
Stephen Jenkins () and
Roger Wilkins ()
Additional contact information
Nicolas HÃ©rault: Melbourne Institute: Applied Economic and Social Research, The University of Melbourne, https://findanexpert.unimelb.edu.au/display/person125238
Roger Wilkins: Melbourne Institute: Applied Economic and Social Research, The University of Melbourne, http://findanexpert.unimelb.edu.au/display/person143
Authors registered in the RePEc Author Service: Nicolas Hérault ()
Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne
Survey under-coverage of top incomes leads to bias in survey-based estimates of overall income inequality. Using income tax record data in combination with survey data is a potential approach to address the problem; we consider here the UKâ€™s pioneering â€˜SPI adjustmentâ€™ method that implements this idea. Since 1992, the principal income distribution series (reported annually in Households Below Average Income) has been based on household survey data in which the incomes of a small number of â€˜very richâ€™ individuals are adjusted using information from â€˜very richâ€™ individuals in personal income tax return data. We explain what the procedure involves, reveal the extent to which it addresses survey under-coverage of top incomes, and show how it affects estimates of overall income inequality. More generally, we assess whether the SPI adjustment is fit for purpose and consider whether variants of it could be employed by other countries.
Keywords: Inequality; income inequality; survey under-coverage; SPI adjustment; top incomes; tax return data; survey data (search for similar items in EconPapers)
JEL-codes: D31 C81 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lma and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
http://melbourneinstitute.unimelb.edu.au/__data/as ... 394797/wp2017n16.pdf (application/pdf)
Working Paper: Survey under-coverage of top incomes and estimation of inequality: what is the role of the UKâ€™s SPI adjustment? (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iae:iaewps:wp2017n16
Access Statistics for this paper
More papers in Melbourne Institute Working Paper Series from Melbourne Institute of Applied Economic and Social Research, The University of Melbourne Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Sheri Carnegie ().