What did you really earn last year?: explaining measurement error in survey income data. (29th April 2019)

• Record Type: Journal Article
• Authors: Angel, Stefan; Disslbacher, Franziska; Humer, Stefan; Schnetzer, Matthias
• Is Part Of: Journal of the Royal Statistical Society. Volume 182:Number 4(2019)
• Page Start: 1411
• Page End: 1437
• Publication Date: 2019-04-29
• Subjects: Income measurement error -- Register data -- Response error -- Survey data -- Survey error -- Survey methods; Social sciences -- Statistical methods -- Periodicals; Statistics -- Periodicals; 300.15195
• DOI: 10.1111/rssa.12463
• Languages: English
• ISSNs: 0964-1998

Abstract

Summary: The paper analyses the sources of income measurement error in surveys with a unique data set. We use the Austrian 2008–2011 waves of the European Union 'Statistics on income and living conditions' survey which provide individual information on wages, pensions and unemployment benefits from survey interviews and officially linked administrative records. Thus, we do not have to fall back on complex two‐sample matching procedures like related studies. We empirically investigate four sources of measurement error, namely social desirability, sociodemographic characteristics of the respondent, the survey design and the presence of learning effects. We find strong evidence for a social desirability bias in income reporting, whereas the presence of learning effects is mixed and depends on the type of income under consideration. An Owen value decomposition reveals that social desirability is a major explanation of misreporting in wages and pensions, whereas sociodemographic characteristics are most relevant for mismatches in unemployment benefits.