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Is income inequality in Bulgaria underestimated in survey data?

Author

Listed:
  • Petar Peshev
  • Kristina Stefanova
  • Ivan Bozhikin
  • Radostina Stamenova
  • Ivanina Mancheva

Abstract

The present study analyses wage income inequality in Bulgaria during the period 2010-2019, using data from the National Revenue Agency (NRA) on the actual incurred income of taxpayers and survey data on wage income from the Household Budget Survey of the National Statistical Institute (NSI). Key indicators of income inequality are derived under both approaches, which are compared and evaluated through descriptive analysis. The NSI survey data permanently underestimates the level of income and inequality in its distribution, as evidenced by the Gini coefficient, the decile and percentile ratios, as well as other indicators based on them.

Suggested Citation

  • Petar Peshev & Kristina Stefanova & Ivan Bozhikin & Radostina Stamenova & Ivanina Mancheva, 2022. "Is income inequality in Bulgaria underestimated in survey data?," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 301-326.
    • Handle: RePEc:bas:econth:y:2022:i:3:p:301-326
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    References listed on IDEAS

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    1. Mihaylova Svilena & Bratoeva-Manoleva Silviya, 2017. "Social Transfers and Income Inequality in Bulgaria," South East European Journal of Economics and Business, Sciendo, vol. 12(1), pages 38-49, April.
    2. Nikolaos Papanikolaou, 2021. "Tax Progressivity of Personal Wages and Income Inequality," JRFM, MDPI, vol. 14(2), pages 1-11, February.
    3. Nishant Yonzan & Branko Milanovic & Salvatore Morelli & Janet Gornick, 2022. "Drawing a Line: Comparing the Estimation of Top Incomes between Tax Data and Household Survey Data," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 67-95, March.
    4. Brzezinski, Michal, 2018. "Income inequality and the Great Recession in Central and Eastern Europe," Economic Systems, Elsevier, vol. 42(2), pages 219-247.
    5. Ranaldi, Marco & Milanović, Branko, 2022. "Capitalist systems and income inequality," Journal of Comparative Economics, Elsevier, vol. 50(1), pages 20-32.
    6. Laura Carvalho & Armon Rezai, 2016. "Personal income inequality and aggregate demand," Cambridge Journal of Economics, Oxford University Press, vol. 40(2), pages 491-505.
    7. Richard V. Burkhauser & Shuaizhang Feng & Stephen P. Jenkins & Jeff Larrimore, 2012. "Recent Trends in Top Income Shares in the United States: Reconciling Estimates from March CPS and IRS Tax Return Data," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 371-388, May.
    8. Jesse Bricker & Alice Henriques & Jacob Krimmel & John Sabelhaus, 2016. "Measuring Income and Wealth at the Top Using Administrative and Survey Data," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(1 (Spring), pages 261-331.
    9. Ekaterina Tosheva & Iva Tasseva & Dragomir Draganov & Venelin Boshnakov, 2016. "Effects of changes in tax-transfer system on households income distribution in Bulgaria: simulation analysis using EUROMOD for 2011-2015," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 5, pages 51-71,72-91.
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    Cited by:

    1. Svilena Mihaylova, 2023. "Wage Inequality in Bulgaria: Decomposition by Economic Sectors, Occupational Groups and Districts," Bulgarian Economic Papers bep-2023-05, Faculty of Economics and Business Administration, Sofia University St Kliment Ohridski - Bulgaria // Center for Economic Theories and Policies at Sofia University St Kliment Ohridski, revised Sep 2023.
    2. 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

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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