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Correcting for the missing rich: An application to Wealth Survey Data

Correcting for the missing rich: An application to Wealth Survey Data

Eckerstorfer, Paul, Halak, Johannes, Kapeller, Jakob, Schütz, Bernhard, Springholz, Florian and Wildauer, Rafael (2015) Correcting for the missing rich: An application to Wealth Survey Data. Review of Income and Wealth, 62 (4). pp. 605-627. ISSN 0034-6586 (Print), 1475-4991 (Online) (doi:https://doi.org/10.1111/roiw.12188)

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Abstract

It is a well-known criticism that if the distribution of wealth is highly concentrated, survey data are hardly reliable when it comes to analyzing the richest parts of society. This paper addresses this criticism by providing a general rationale of the underlying methodological problem as well as by proposing a specific methodological approach tailored to correcting the arising bias. We illustrate the latter approach by using Austrian data from the Household Finance and Consumption Survey. Specifically, we identify suitable parameter combinations by using a series of maximum-likelihood estimates and appropriate goodness-of-fit tests to avoid arbitrariness with respect to the fitting of the Pareto distribution. Our results suggest that the alleged non-observation bias is considerable, accounting for about one quarter of total net wealth in the case of Austria. The method developed in this paper can easily be applied to other countries where survey data on wealth are available.

Item Type: Article
Uncontrolled Keywords: C46, C81, D31, non-observation bias, Pareto distribution, wealth distribution
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HB Economic Theory
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of International Business & Economics
Faculty of Business > Greenwich Political Economy Research Centre (GPERC)
Related URLs:
Last Modified: 28 Jun 2018 11:59
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: GREAT b
Selected for GREAT 2019: None
URI: http://gala.gre.ac.uk/id/eprint/18279

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