Approximations to the truth: comparing survey and microsimulation approaches to measuring income for social indicators

Authors

Francesco Figari, Maria Iacovou, Alexandra J. Skew, Holly Sutherland

Publication Date

Feb 2012

Abstract

In this paper, we evaluate income distributions in four European countries (Austria, Italy, Spain and Hungary) using two complementary approaches: a standard approach based on reported incomes in survey data, and a microsimulation approach, where taxes and benefits are simulated. These two approaches may be expected to generate slightly different results, particularly in respect of individuals on lower incomes, because benefit receipts tend to be under-reported in survey data, and over-estimated in microsimulation procedures. However, we find that the two approaches do in fact produce reasonably consistent results, in terms of both inequality measures and poverty rates. To the extent that the results differ, we explore the reasons why these differences arise, and suggest directions for future research, in which each approach may inform improvements in the other.

Volume and page numbers

Volume: 105 , p.387 -407

DOI

http://dx.doi.org/10.1007/s11205-010-9775-4

Publication type

Journal Article

Research area

Tax and benefit systems

Notes

not held in Res Lib bibliographic reference only

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Related Publications

• Approximations to the truth: comparing survey and microsimulation approaches to measuring income for social indicators

  Francesco Figari, Maria Iacovou, Alexandra J. Skew, Holly Sutherland, EUROMOD Working Paper Series -08 Jun 2010

• Approximations to the truth: comparing survey and microsimulation approaches to measuring income for social indicators

  Francesco Figari, Maria Iacovou, Alexandra J. Skew, Holly Sutherland, ISER Working Paper Series -28 Apr 2010

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