Measurement Error in Earnings Data: Using a Mixture Model Approach to Combine Survey and Register Data

A-Tier
Journal: Journal of Business & Economic Statistics
Year: 2011
Volume: 30
Issue: 2
Pages: 191-201

Score contribution per author:

1.341 = (α=2.01 / 3 authors) × 2.0x A-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Survey data on earnings tend to contain measurement error. Administrative data are superior in principle, but are worthless in case of a mismatch. We develop methods for prediction in mixture factor analysis models that combine both data sources to arrive at a single earnings figure. We apply the methods to a Swedish data set. Our results show that register earnings data perform poorly if there is a (small) probability of a mismatch. Survey earnings data are more reliable, despite their measurement error. Predictors that combine both and take conditional class probabilities into account outperform all other predictors. This article has supplementary material online.

Technical Details

RePEc Handle
repec:taf:jnlbes:v:30:y:2011:i:2:p:191-201
Journal Field
Econometrics
Author Count
3
Added to Database
2026-01-26