JSM 2004 - Toronto

Abstract #300385

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Activity Number: 434
Type: Contributed
Date/Time: Thursday, August 12, 2004 : 10:30 AM to 12:20 PM
Sponsor: Section on Government Statistics
Abstract - #300385
Title: Missing Income Information in Panel Data: Incidence, Imputation, and Its Impact on the Income Distribution
Author(s): Joachim R. Frick*+ and Markus M. Grabka
Companies: DIW Berlin and DIW Berlin
Address: SOEP, Berlin, International, 14195 , Germany
Keywords: item nonresponse ; imputation ; income inequality ; panel data ; missing data
Abstract:

Based on data from the German Socio-Economic Panel study (SOEP), this paper deals with the selectivity of missing income data due to item-nonresponse and the various longitudinal imputation strategies applied to this panel dataset. We analyze the impact of imputation on the personal income distribution and on income mobility. Comparing income inequality measures based on truly observed data to those derived from all observations, we find an increase in inequality due to imputation. This effect appears to be relevant in both tails of the distribution. Longitudinal analyses show a positive correlation of item nonresponse on income data over time, and also provide evidence of item nonresponse being a predictor of subsequent unit-nonresponse. Applying mobility indicators provide evidence of income mobility being understated using truly observed information only. Multivariate models show that survey-related factors (e.g., interview mode) and indicators for complex income structures are significantly correlated with item nonresponse. In conclusion, our results indicate the selectivity of item nonresponse on income questions in social surveys and push the necessity for adequate imputation.


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