Skip to content

Journal Article

The time lag in annual household-based income measures: assessing and correcting bias

Authors

Publication date

2008

Abstract

Annual income data are typically provided with a time lag. This article reviews several ways of dealing with this time lag in the construction of annual household-based income measures for individual economic well-being. It also proposes an alternative method that yields better estimates for equivalized household income, especially in the case of household composition change. Next, the two most commonly applied income measures are compared to this alternative measure with empirical income data from the European Community Household Panel. This comparison reveals that ignoring the time lag and household changes leads to substantial bias in income and poverty estimates and to erroneous conclusions about the determinants of poverty entry. The evidence in this article will be useful to researchers who want to make a well-informed choice between different annual income measures.

Published in

Review of Income and Wealth

Volume

54 (1):71-88

DOI

http://dx.doi.org/10.1111/j.1475-4991.2007.00260.x

Subjects

Poverty and Income Dynamics

Links

http://serlib0.essex.ac.uk/search/?searchtype=s&searcharg=review+of+income+and+wealth&searchscope=5&sortdropdown=-&SORT=A&extended=0&SUBMIT=Search&searchlimits=&searchorigarg=sAPPLIED+STATISTICS

Notes

Albert Sloman Library Periodicals *restricted to Univ. Essex registered users*

#511019


Research home

Research home

News

Latest findings, new research

Publications search

Search all research by subject and author

Podcasts

Researchers discuss their findings and what they mean for society

Projects

Background and context, methods and data, aims and outputs

Events

Conferences, seminars and workshops

Survey methodology

Specialist research, practice and study

Taking the long view

ISER's annual report

Themes

Key research themes and areas of interest