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Are survey data underestimating the inequality of wealth?

Author

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  • Jaanika Meriküll

    (Bank of Estonia
    University of Tartu)

  • Tairi Rõõm

    (Bank of Estonia
    Tallinn University of Technology)

Abstract

This paper studies households’ response behaviour in a wealth survey. We analyse how unit non-response and item non-response contribute to the estimated distribution of wealth. Our findings imply that wealth inequality is underestimated in the survey. The downward bias is originating from item non-response and not from unit non-response. Wealthier households are less likely to provide answers to wealth-related questions. As a result, the level of net wealth is underestimated and the top tail of its distribution is missing. Imputation can eliminate biases throughout most of the wealth distribution but does not recover the estimates in the top tail.

Suggested Citation

  • Jaanika Meriküll & Tairi Rõõm, 2022. "Are survey data underestimating the inequality of wealth?," Empirical Economics, Springer, vol. 62(2), pages 339-374, February.
    • Handle: RePEc:spr:empeco:v:62:y:2022:i:2:d:10.1007_s00181-021-02030-6
    DOI: 10.1007/s00181-021-02030-6
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    3. Petar Peshev, 2023. "Estimation of the Value, Distribution and Concentration of Wealth in Bulgaria, 1995-2020," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 104-129.

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    More about this item

    Keywords

    Wealth distribution; Unit non-response; Item non-response; Participation bias; Wealth survey; Wealth inequality; Household Finance and Consumption Survey; Estonia;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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