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The under-reporting of financial wealth in the Survey on Household income and Wealth

Author

Listed:
  • Leandro D�Aurizio

    (Bank of Italy)

  • Ivan Faiella

    (Bank of Italy)

  • Stefano Iezzi

    (Bank of Italy)

  • Andrea Neri

    (Bank of Italy)

Abstract

The sample estimates are uniformly below those of the Financial Accounts, even after harmonising all the definitions and the evaluation criteria. Such a problem can stem from the interviewee�s unwillingness to disclose the actual value of the asset (under-reporting). The paper presents a method to correct this potential source of bias in order to improve Survey of Household Income and Wealth financial assets. We use a sample survey of customers of the Unicredit group, coupled with administrative data on the assets actually owned, as external sources of information. The adjustment procedure enables to account for a large share of the gap between the figures derived from the sample and from the Financial accounts, significantly increasing the average value of the financial assets (inflating the unadjusted figure of 22.000 euros to 59.000 euros, amounting to about 85 percent of the Financial account estimates). The adjustment produces a larger correction for private bonds and mutual funds. The intensity of the correction is higher for one-person households, when the head of household is less educated or not employed, and it raises with his/her age.

Suggested Citation

  • Leandro D�Aurizio & Ivan Faiella & Stefano Iezzi & Andrea Neri, 2006. "The under-reporting of financial wealth in the Survey on Household income and Wealth," Temi di discussione (Economic working papers) 610, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_610_06
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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2006/2006-0610/tema_610.pdf
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    Citations

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    Cited by:

    1. Pierfederico Asdrubali & Simone Tedeschi & Luigi Ventura, 2020. "Household risk‐sharing channels," Quantitative Economics, Econometric Society, vol. 11(3), pages 1109-1142, July.
    2. Paolo Surico & Riccardo Trezzi, 2015. "Consumer Spending and Fiscal Consolidation: Evidence from a Housing Tax Experiment," Finance and Economics Discussion Series 2015-57, Board of Governors of the Federal Reserve System (U.S.).
    3. Andrea Neri & Maria Giovanna Ranalli, 2012. "To misreport or not to report? The measurement of household financial wealth," Temi di discussione (Economic working papers) 870, Bank of Italy, Economic Research and International Relations Area.
    4. Giuseppe Cappelletti, 2012. "Do wealth fluctuations generate time-varying risk aversion? Italian micro-evidence on household asset allocation," Temi di discussione (Economic working papers) 845, Bank of Italy, Economic Research and International Relations Area.
    5. Andrea Neri & Roberta Zizza, 2010. "Income reporting behaviour in sample surveys," Temi di discussione (Economic working papers) 777, Bank of Italy, Economic Research and International Relations Area.
    6. Frost, Jon & Gambacorta, Leonardo & Gambacorta, Romina, 2022. "On the nexus between wealth inequality, financial development and financial technology," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 429-451.
    7. Danilo Liberati & Valerio Vacca, 2016. "With (more than) a little help from my bank. Loan-to-value ratios and access to mortgages in Italy," Questioni di Economia e Finanza (Occasional Papers) 315, Bank of Italy, Economic Research and International Relations Area.
    8. 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.

    More about this item

    Keywords

    Household Wealth; Survey Method; Discrete Regression and Qualitative Choice Models;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C42 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Survey Methods
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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