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The gap between macro and micro economic statistics: Estimation of the misreporting model using micro-data sets derived from the Consumer Expenditure Survey

Author

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  • Thesia I. Garner
  • Atsushi Maki

Abstract

In many countries we observe a gap between macroeconomic and microeconomic statistics. In order to explain the underreporting observed in microeconomic statistics, the present paper tests the misreporting hypothesis through the double hurdle model. The misreporting hypothesis is based on some key assumptions: It is assumed that there are two categories of 'zero expenditure households' in the Survey - one category involves households that did not purchase consumer durables during the survey period and reported zero expenditure correctly on the Survey while the other category of 'zero expenditure households' involves households that, although they purchased consumer durables during the survey period, reported zero expenditure on the Survey. This is the source of misreporting. We also assume that there are 'positive expenditure households' for consumer durables in the Survey. These positive expenditure households for consumer durables are assumed, in the misreporting hypothesis, to have reported correctly their expenditure on consumer durables in the Survey. This model enables us to correct for over-reporting of zero expenditure households in the micro data. The data used for estimation involves thirteen clusters of consumer durables from the Consumer Expenditure Survey complied by the Bureau of Labor Statistics. The empirical results are satisfactory in supporting the conclusion that misreporting plays an important role in the underreporting in microeconomic statistics compiled by the Bureau of Labor Statistics compared with macroeconomic statistics compiled by the Bureau of Economic Analysis, the US Department of Commerce

Suggested Citation

  • Thesia I. Garner & Atsushi Maki, 2004. "The gap between macro and micro economic statistics: Estimation of the misreporting model using micro-data sets derived from the Consumer Expenditure Survey," Econometric Society 2004 Australasian Meetings 33, Econometric Society.
  • Handle: RePEc:ecm:ausm04:33
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The rich are different than you and me: They spend more.
      by Ezra Klein in Ezra Klein's Wonkblog on 2012-04-26 15:17:25

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    Cited by:

    1. Akerele, Dare & Tiffin, R. & Srinivasan, C. S., 2013. "Household Food Demand in Nigeria: an Application of Multivariate Double-hurdle Model," 87th Annual Conference, April 8-10, 2013, Warwick University, Coventry, UK 158700, Agricultural Economics Society.
    2. Orazio Attanasio & Erik Hurst & Luigi Pistaferri, 2014. "The Evolution of Income, Consumption, and Leisure Inequality in the United States, 1980–2010," NBER Chapters,in: Improving the Measurement of Consumer Expenditures, pages 100-140 National Bureau of Economic Research, Inc.
    3. Orazio Attanasio & Erik Hurst & Luigi Pistaferri, 2012. "The Evolution of Income, Consumption, and Leisure Inequality in The US, 1980-2010," NBER Working Papers 17982, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    misreporting hypothesis; double hurdle model; underreporting;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

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