Judging the Quality of Survey Data by Comparison with 'Truth' as Measured by Administrative Records: Evidence from Sweden

Chapter in NBER Book Improving the Measurement of Consumer Expenditures, Christopher Carroll, Thomas Crossley, John Sabelhaus, eds., Forthcoming

NBER Book Series Studies in Income and Wealth, University of Chicago Press, Forthcoming

36 Pages Posted: 22 Feb 2012 Last revised: 26 Jan 2014

Ralph S. J. Koijen

New York University (NYU) - Department of Finance; Centre for Economic Policy Research (CEPR)

Stijn Van Nieuwerburgh

New York University Stern School of Business, Department of Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Roine Vestman

Stockholm University - Department of Economics; Swedish House of Finance

Date Written: March 8, 2013

Abstract

We construct a new consumption measure as a residual from the budget constraint. Consumption is that part of income that is not used to increase assets. Our measurement relies on detailed Swedish registry data on the various sources of income and the composition of households' asset portfolio, collected as part of the tax assessment process. The richness of the data allow us to impute a household-specific portfolio return, which is important to arrive at an accurate consumption measure with our method. We match the Swedish households that are surveyed with a standard European Household Budget Survey to our data set, allowing a detailed comparison of the two consumption measures. We find that the survey-based measures understate consumption for home-owners, high-income, and high-wealth households. Survey-based consumption appears unbiased for the average renter and, if anything, slightly understates consumption for the youngest and poorest in our sample. Taken together, the survey understates consumption inequality. Separately, Swedish car registry data on car transactions indicate severe reporting biases in the survey.

Keywords: Consumption measurement, consumption inequality, measurement error, surveys, household finance

JEL Classification: D12, D14, D31, E21, G11

Suggested Citation

Koijen, Ralph S. J. and Van Nieuwerburgh, Stijn and Vestman, Roine, Judging the Quality of Survey Data by Comparison with 'Truth' as Measured by Administrative Records: Evidence from Sweden (March 8, 2013). Chapter in NBER Book Improving the Measurement of Consumer Expenditures, Christopher Carroll, Thomas Crossley, John Sabelhaus, eds., Forthcoming. Available at SSRN: https://ssrn.com/abstract=2006423 or http://dx.doi.org/10.2139/ssrn.2006423

Ralph S. J. Koijen

New York University (NYU) - Department of Finance ( email )

Stern School of Business
44 West 4th Street
New York, NY 10012-1126
United States

HOME PAGE: http://www.koijen.net

Centre for Economic Policy Research (CEPR) ( email )

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Stijn Van Nieuwerburgh (Contact Author)

New York University Stern School of Business, Department of Finance ( email )

44 West 4th Street
Suite 9-190
New York, NY 10012-1126
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Roine Vestman

Stockholm University - Department of Economics ( email )

S-10691 Stockholm
Sweden

HOME PAGE: http://www.ne.su.se/

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

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