Statistical Bias in Racial and Ethnic Disparity Estimates Using BIFSG

41 Pages Posted: 19 Mar 2024

See all articles by Elena Derby

Elena Derby

Government of the United States of America - Joint Committee on Taxation

Connor Dowd

Government of the United States of America - Joint Committee on Taxation

Jacob Mortenson

Joint Committee on Taxation, US Congress

Date Written: February 20, 2024

Abstract

Bayesian Improved First Name and Surname Geocoding (BIFSG) is a widely used method for inferring race and ethnicity in data when this information is not available. It is well known that the assumptions underlying BIFSG can fail, but the effects of these failures on estimation by race and ethnicity are not well understood. In this paper we combine U.S. administrative tax data with data containing race and ethnicity to assess statistical bias in estimates of differences between racial/ethnic groups. We find that BIFSG suffers from majoritarian bias, overstating the probabilities that non-White individuals are White. When using these probabilities to estimate disparities between groups, BIFSG estimates understate differences in various outcomes between White and non-White taxpayers, in some cases reversing the direction of the disparity.

Keywords: Tax, BIFSG, BISG, race, ethnicity,

JEL Classification: H2, C11, C81

Suggested Citation

Derby, Elena and Dowd, Connor and Mortenson, Jacob, Statistical Bias in Racial and Ethnic Disparity Estimates Using BIFSG (February 20, 2024). Available at SSRN: https://ssrn.com/abstract=4733299 or http://dx.doi.org/10.2139/ssrn.4733299

Elena Derby

Government of the United States of America - Joint Committee on Taxation ( email )

441 2nd st SW
Washington, DC 20002
United States

Connor Dowd (Contact Author)

Government of the United States of America - Joint Committee on Taxation ( email )

441 2nd st SW
Washington, DC 20002
United States

Jacob Mortenson

Joint Committee on Taxation, US Congress ( email )

502 Ford House Office Building
Washington, DC 20515
United States

HOME PAGE: http://www.jacobmortenson.com

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
26
Abstract Views
147
PlumX Metrics