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Statistical matching and uncertainty analysis in combining household income and expenditure data

Author

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  • Pier Luigi Conti

    () (Dipartimento di Scienze Statistiche, Sapienza Università di Roma)

  • Daniela Marella

    () (Dipartimento di Scienze della Formazione, Università Roma Tre)

  • Andrea Neri

    () (Bank of Italy)

Abstract

The availability of microdata on both income and expenditure is highly recommended if one wants to assess the distributional consequences of policy changes. In Italy, the main sources used for estimating household income and expenditure are the Bank of Italy's Survey on Household Income and Wealth and the Italian National Institute of Statistics Household Budget Survey. However, there is no single data source containing information on both expenditure and income. The problem is generally overcome with statistical matching procedures based on the conditional independence (CIA) assumption. The aim of this paper is to present a method to combine information coming from different databases relaxing the CIA assumption. In particular we propose a method to combine household income and expenditure data under logical constraints regarding the average propensity to consume. We also propose an estimate of a plausible joint distribution function for household income and expenditure.

Suggested Citation

  • Pier Luigi Conti & Daniela Marella & Andrea Neri, 2015. "Statistical matching and uncertainty analysis in combining household income and expenditure data," Temi di discussione (Economic working papers) 1018, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_1018_15
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    References listed on IDEAS

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    1. Caballero, Ricardo J., 1990. "Consumption puzzles and precautionary savings," Journal of Monetary Economics, Elsevier, vol. 25(1), pages 113-136, January.
    2. Martin Browning & M. Dolores Collado, 2001. "The Response of Expenditures to Anticipated Income Changes: Panel Data Estimates," American Economic Review, American Economic Association, vol. 91(3), pages 681-692, June.
    3. Guiso, Luigi & Jappelli, Tullio & Terlizzese, Daniele, 1992. "Earnings uncertainty and precautionary saving," Journal of Monetary Economics, Elsevier, vol. 30(2), pages 307-337, November.
    4. Erich Battistin & Raffaele Miniaci & Guglielmo Weber, 2003. "What Do We Learn from Recall Consumption Data?," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
    5. Tedeschi, Simone & Pisano, Elena, 2013. "Data Fusion Between Bank of Italy-SHIW and ISTAT-HBS," MPRA Paper 51253, University Library of Munich, Germany.
    6. Rubin, Donald B, 1986. "Statistical Matching Using File Concatenation with Adjusted Weights and Multiple Imputations," Journal of Business & Economic Statistics, American Statistical Association, vol. 4(1), pages 87-94, January.
    7. Michael G. Palumbo, 1999. "Uncertain Medical Expenses and Precautionary Saving Near the End of the Life Cycle," Review of Economic Studies, Oxford University Press, vol. 66(2), pages 395-421.
    8. Orazio Attanasio & Luigi Pistaferri, 2014. "Consumption Inequality over the Last Half Century: Some Evidence Using the New PSID Consumption Measure," American Economic Review, American Economic Association, vol. 104(5), pages 122-126, May.
    9. Rodgers, Willard L, 1984. "An Evaluation of Statistical Matching," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(1), pages 91-102, January.
    10. Martin Browning & Thomas F. Crossley & Joachim Winter, 2014. "The Measurement of Household Consumption Expenditures," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 475-501, August.
    11. Giulia Cifaldi & Andrea Neri, 2013. "Asking income and consumption questions in the same survey: what are the risks?," Temi di discussione (Economic working papers) 908, Bank of Italy, Economic Research and International Relations Area.
    12. Skinner, Jonathan, 1987. "A superior measure of consumption from the panel study of income dynamics," Economics Letters, Elsevier, vol. 23(2), pages 213-216.
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    Cited by:

    1. Lamarche, Pierre, 2017. "Estimating consumption in the HFCS: Experimental results on the first wave of the HFCS," Statistics Paper Series 22, European Central Bank.

    More about this item

    Keywords

    statistical matching; uncertainty; matching error; iterative proportional fitting;

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods

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