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Imputation of missing expenditure information in standard household income surveys

Author

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  • Massimo Baldini

    ()

  • Daniele Pacifico

    ()

  • Federica Termini

    ()

Abstract

The aim of this paper is to present a new methodology for dealing with missing expenditure information in standard income surveys. Under given conditions, typical imputation procedures, such as statistical matching or regression-based models, can replicate well in the income survey both the unconditional density of household expenditure and its joint density with a set of socio-demographic variables that the two surveys have in common. However, standard imputation procedures may fail in capturing the overall relation between income and expenditure, especially if the common control variables used for the imputation have a weak correlation with the missing information. The paper suggests a two-step imputation procedure that allows reproducing the joint relation between income and expenditure observed from external sources, while maintaining the advantages of traditional imputation methods. The proposed methodology suits well for any empirical analysis that needs to relate income and consumption, such as the estimation of Engel curves or the evaluation of consumption taxes through micro-simulation models. An empirical application shows the makings of such a technique for the evaluation of the distributive effects of consumption taxes and proves that common imputation methods may produce significantly biased results in terms of policy recommendations when the control variables used for the imputation procedure are weakly correlated with the missing variable.

Suggested Citation

  • Massimo Baldini & Daniele Pacifico & Federica Termini, 2015. "Imputation of missing expenditure information in standard household income surveys," Center for the Analysis of Public Policies (CAPP) 0116, Universita di Modena e Reggio Emilia, Dipartimento di Economia "Marco Biagi".
  • Handle: RePEc:mod:cappmo:0116
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    File URL: http://155.185.68.2/campusone/web_dep/CappPaper/Capp_p116.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Baris Ucar & Gianni Betti, 2016. "Longitudinal statistical matching: transferring consumption expenditure from HBS to SILC panel survey," Department of Economics University of Siena 739, Department of Economics, University of Siena.
    2. Nicola Curci & Marco Savegnago, 2019. "Shifting taxes from labour to consumption: the efficiency-equity trade-off," Temi di discussione (Economic working papers) 1244, Bank of Italy, Economic Research and International Relations Area.
    3. Lamarche, Pierre, 2017. "Estimating consumption in the HFCS: Experimental results on the first wave of the HFCS," Statistics Paper Series 22, European Central Bank.
    4. Teixidó, Jordi J. & Verde, Stefano F., 2017. "Is the Gasoline Tax Regressive in the Twenty-First Century? Taking Wealth into Account," Ecological Economics, Elsevier, vol. 138(C), pages 109-125.

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    More about this item

    Keywords

    expenditure imputation; matching; propensity score; tax incidence;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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