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Measuring wealth mobility

Author

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  • Andrea Neri

    () (Bank of Italy)

Abstract

In the economic literature on mobility measurement issues are generally disregarded. The aim of the paper is to assess their impact on the analysis of Italian households' mobility across the wealth distribution in the 1989-2004 period. The paper shows that response (or measurement) errors and transitory shocks may account up to 30-50 per cent of the observed mobility (depending on the index used). Moreover, also the dynamics of mobility is likely to be biased by the dynamics of response (or measurement) errors. In the case of Italy, the declining level of observed mobility is downward biased by the increasing difficulty in measuring household wealth (which results in an increase of response errors). Measurement issues appear to be more important than socio-demographic characteristics to explain mobility.

Suggested Citation

  • Andrea Neri, 2009. "Measuring wealth mobility," Temi di discussione (Economic working papers) 703, Bank of Italy, Economic Research and International Relations Area.
  • Handle: RePEc:bdi:wptemi:td_703_09
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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2009/2009-0703/en_tema_703.pdf
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    References listed on IDEAS

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    Cited by:

    1. Giovanni D'Alessio & Stefano Iezzi, 2016. "Over-indebtedness in Italy: how widespread and persistent is it?," Questioni di Economia e Finanza (Occasional Papers) 319, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    wealth mobility; attrition; response error; latent class analysis;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D3 - Microeconomics - - Distribution
    • P46 - Economic Systems - - Other Economic Systems - - - Consumer Economics; Health; Education and Training; Welfare, Income, Wealth, and Poverty

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