Lining up: Survey and administrative data estimates of wealth concentration

Abstract

Abstract. The Survey of Consumer Finances (SCF) has a dual-frame sample design that supplements a standard area-probability frame with a sample of observations drawn from statistical records derived from tax returns. The tax-based frame is stratified on the basis of a "wealth index" constructed largely from observed income flows, with the intent of heavily oversampling wealthy households. Although the SCF is not specifically designed to estimate wealth concentration, the design arguably provides sufficient support to enable such analysis with a reasonable level of credibility. Similar estimates may also be made by using tax-based data directly, as in Saez and Zucman [1], by using a construct very close to a key part of the SCF wealth index. Such an approach has appeal as a way of tapping a much larger set of information to improve SCF estimates. Not surprisingly, there are differences in the two approaches, largely as a result of conceptual differences or complications in the survey implementation. This paper focuses on the top 1 percent of the wealth distribution, the group most intensively covered by the SCF list sample and it explores the stability of the relationship between the patterns of concentration in the survey data and parallel patterns in tax-based estimates and considers how those patterns differ across survey participants, the full sample and the entire survey frame. In addition, the paper makes as series of recommendation for further research on the technical support of the survey.

Chasing the Tail: A Generalized Pareto Distribution Approach to Estimating Wealth Inequality

“…As a possible consequence, the SCF also yields an estimate of total household wealth much closer to the independently estimated aggregate figure than is the case for the Austrian HFCS. The SCF, however, explicitly excludes the very wealthiest U.S families, as determined according to a "rich list", and there is some indication that it may deviate from the expected distribution at the extreme top of the distribution, even when those households are excluded (see Kennickell, 2017).…”

“…This section applies the technical apparatus of the previous section to data on net worth from the 2017 Austrian implementation of the Household Finance and Consumption Survey (HFCS) for Austria (see Fessler et al [2019] and Albacete et al [2019]) and the 2016 Survey of Consumer Finances (SCF) for the U.S. (see Bricker et al [2017] and Kennickell [2017]). 18 The larger HFCS project consists of ex ante harmonized surveys for 18 euro-area countries and two other European countries.…”