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Measuring Corruption from Household Income and Consumption Micro-Data: An International Perspective

Author

Listed:
  • Sarullo, Nicolas

    (University of California at Berkeley)

  • Gorodnichenko, Yuriy

    (University of California, Berkeley)

  • Deryugina, Tatyana

    (University of Illinois at Urbana-Champaign)

  • Hodson, James

    (AI for Good)

  • Sologoub, Ilona

    (VoxUkraine)

  • Fedyk, Anastassia

    (University of California at Berkeley)

Abstract

Using household survey data on expenditures and incomes, we construct an objective measure of corruption in the public sector for a broad spectrum of countries. Specifically, we focus on the consumption-income gap for public sector workers relative to private sector workers to gauge the extent of hidden income (bribes) in the government. After validating our data and documenting properties of the consumption-income gap, we compare our measure with popular corruption perception indices. We find that i) the relationship between our measure and the alternatives is nonlinear; ii) available indices appear to be only weakly (and sometimes “wrongly”) correlated with the consumption-income gap at high frequencies; iii) the available indices appear to have a low weight on the relative consumption-income gap in the public sector.

Suggested Citation

  • Sarullo, Nicolas & Gorodnichenko, Yuriy & Deryugina, Tatyana & Hodson, James & Sologoub, Ilona & Fedyk, Anastassia, 2025. "Measuring Corruption from Household Income and Consumption Micro-Data: An International Perspective," IZA Discussion Papers 18195, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18195
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    Keywords

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    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H1 - Public Economics - - Structure and Scope of Government
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • P2 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies

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