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To misreport or not to report? The measurement of household financial wealth

Author

Listed:
  • Andrea Neri

    (Bank of Italy)

  • Maria Giovanna Ranalli

    (Department of Economics, Finance and Statistics, University of Perugia)

Abstract

The objective of the paper is to adjust for the bias due to unit non-response and measurement error in survey estimates of total household financial wealth. Sample surveys are a useful source of information on household wealth. Yet, survey estimates are affected by non-sampling errors. In particular, in the case of household wealth, unit non-response and measurement error can severely bias the estimates. Using the Italian Survey on Household Income and Wealth (SHIW), we exploit the available auxiliary information in order to assess the magnitude of this bias. We find evidence that for this kind of survey, non-sampling errors are a major issue, possibly more serious than sampling errors. Moreover, in the case of SHIW the potential bias due to measurement error seems to outweigh that induced by non-response.

Suggested Citation

  • 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.
    • Handle: RePEc:bdi:wptemi:td_870_12
    as

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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2012/2012-0870/en_tema_870.pdf
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    References listed on IDEAS

    as
    1. Ruppert,David & Wand,M. P. & Carroll,R. J., 2003. "Semiparametric Regression," Cambridge Books, Cambridge University Press, number 9780521785167.
    2. Giovanni D'Alessio & Ivan Faiella, 2002. "Non-response behaviour in the Bank of Italy�s Survey of Household Income and Wealth," Temi di discussione (Economic working papers) 462, Bank of Italy, Economic Research and International Relations Area.
    3. Emilia Bonaccorsi di Patti & Enrico Sette, 2012. "Bank balance sheets and the transmission of financial shocks to borrowers: evidence from the 2007-2008 crisis," Temi di discussione (Economic working papers) 848, Bank of Italy, Economic Research and International Relations Area.
    4. Claudia Biancotti & Giovanni D'Alessio & Andrea Neri, 2008. "Measurement Error In The Bank Of Italy'S Survey Of Household Income And Wealth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 466-493, September.
    5. Ruppert,David & Wand,M. P. & Carroll,R. J., 2003. "Semiparametric Regression," Cambridge Books, Cambridge University Press, number 9780521780506.
    6. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Philip Vermeulen, 2016. "Estimating the Top Tail of the Wealth Distribution," American Economic Review, American Economic Association, vol. 106(5), pages 646-650, May.
    2. Jaanika Meriküll & Tairi Rõõm, 2022. "Are survey data underestimating the inequality of wealth?," Empirical Economics, Springer, vol. 62(2), pages 339-374, February.
    3. Arthur B. Kennickell & Peter Lindner & Martin Schürz, 2022. "A new instrument to measure wealth inequality: distributional wealth accounts," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue Q4/21.
    4. Giovanni D'Alessio & Andrea Neri, 2015. "Income and wealth sample estimates consistent with macro aggregates: some experiments," Questioni di Economia e Finanza (Occasional Papers) 272, Bank of Italy, Economic Research and International Relations Area.
    5. Engel, Janina & Riera, Pau Gayà & Grilli, Joseph & Sola, Pierre, 2022. "Developing reconciled quarterly distributional national wealth – insight into inequality and wealth structures," Working Paper Series 2687, European Central Bank.
    6. Vincenzo Alfano, 2020. "Anatomy of social security contribution evasion in Italy," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2020(2), pages 7-37.
    7. Steiner, Viktor & Zhu, Junyi, 2021. "A joint top income and wealth distribution," Discussion Papers 2021/3, Free University Berlin, School of Business & Economics.

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    More about this item

    Keywords

    unit non-response; measurement error; auxiliary information; subsampling; imputation;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • 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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