Dealing with Incomplete Household Panel Data in Inequality Research
Population surveys around the world face the problem of declining cooperation and participation rates of respondents. Not only can item nonresponse and unit nonresponse impair important outcome measures for inequality research such as total household disposable income; there is also a further case of missingness confronting household panel surveys that potentially biases results. The approach commonly used in such surveys of interviewing all adult household members and aggregating their individual incomes to yield a final outcome measure for welfare analyses often suffers from partial unit non-response (PUNR), i.e., the non-response of at least one unit, or member, of an otherwise participating household. In these cases, the aggregate income of all household members lacks at least one individual's income. These processes are typically not random and require appropriate correction. Using data from more than twenty waves of the German Socio-Economic Panel (SOEP) we evaluate four different strategies to deal with this phenomenon: (a) Ignorance, i.e., assuming the missing individual's income to be zero. (b) Adjustment of the equivalence scale to account for differences in household size and composition. (c) Elimination of all households observed to suffer PUNR, and re-weighting of households observed to be at risk of but not affected by PUNR. (d) Longitudinal imputation of the missing income components. The aim of this paper is to show how the choice of technique affects substantive results in the inequality research. We find indications of substantial bias on income inequality and poverty as well as on income mobility. These findings are obviously even more important in cross-national comparative analyses if the data providers in the individual countries deal differently with PUNR in the underlying data.
|Date of creation:||2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.diw.de/en/soep
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Smeeding, Timothy M & Weinberg, Daniel H, 2001. "Toward a Uniform Definition of Household Income," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(1), pages 1-24, March.
- Daniel H. Hill & Robert J. Willis, 2001. "Reducing Panel Attrition: A Search for Effective Policy Instruments," Journal of Human Resources, University of Wisconsin Press, vol. 36(3), pages 416-438.
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
- Fields, Gary S & Ok, Efe A, 1999. "Measuring Movement of Incomes," Economica, London School of Economics and Political Science, vol. 66(264), pages 455-71, November.
- Cheti Nicoletti & Franco Peracchi, 2006. "The effects of income imputation on microanalyses: evidence from the European Community Household Panel," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 169(3), pages 625-646.
- Arie Kapteyn & Pierre-Carl Michaud & James P. Smith & Arthur van Soest, 2006.
"Effects of Attrition and Non-Response in the Health and Retirement Study,"
407, RAND Corporation Publications Department.
- Kapteyn, Arie & Michaud, Pierre-Carl & Smith, James P. & van Soest, Arthur, 2006. "Effects of Attrition and Non-Response in the Health and Retirement Study," IZA Discussion Papers 2246, Institute for the Study of Labor (IZA).
- Joachim R. Frick & Markus M. Grabka, 2007.
"Item Non-response and Imputation of Annual Labor Income in Panel Surveys from a Cross-National Perspective,"
SOEPpapers on Multidisciplinary Panel Data Research
49, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Joachim R. Frick & Markus M. Grabka, 2007. "Item Non-response and Imputation of Annual Labor Income in Panel Surveys from a Cross-National Perspective," Discussion Papers of DIW Berlin 736, DIW Berlin, German Institute for Economic Research.
- Frick, Joachim R. & Grabka, Markus M., 2007. "Item Non-Response and Imputation of Annual Labor Income in Panel Surveys from a Cross-National Perspective," IZA Discussion Papers 3043, Institute for the Study of Labor (IZA).
- Joachim R. Frick & Markus M. Grabka, 2003.
"Imputed Rent and Income Inequality: A Decomposition Analysis for Great Britain, West Germany and the U.S,"
Review of Income and Wealth,
International Association for Research in Income and Wealth, vol. 49(4), pages 513-537, December.
- Frick, Joachim R. & Grabka, Markus M., 2003. "Imputed Rent and Income Inequality: A Decomposition Analysis for Great Britain, West Germany and the U.S," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 513-537.
- Jens Bonke & Hans Uldall-Poulsen, 2007. "Why do families actually pool their income? Evidence from Denmark," Review of Economics of the Household, Springer, vol. 5(2), pages 113-128, June.
- Laurie, Heather & Lynn, Peter, 2008. "The use of respondent incentives on longitudinal surveys," ISER Working Paper Series 2008-42, Institute for Social and Economic Research.
- Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007.
"The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements,"
SOEPpapers on Multidisciplinary Panel Data Research
1, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP) – Scope, Evolution and Enhancements," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 127(1), pages 139-169.
- Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
- Markus M. Grabka & Joachim R. Frick, 2008. "The Shrinking German Middle Class: Signs of Long-Term Polarization in Disposable Income?," Weekly Report, DIW Berlin, German Institute for Economic Research, vol. 4(4), pages 21-27.
When requesting a correction, please mention this item's handle: RePEc:diw:diwsop:diw_sp290. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bibliothek)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.