Representative Wealth Data for Germany from the German SOEP: The Impact of Methodological Decisions Around Imputation and the Choice of the Aggregation Unit

42 Pages Posted: 13 Feb 2008

See all articles by Joachim R. Frick

Joachim R. Frick

German Institute for Economic Research (DIW Berlin) (Deceased) ; Institute for the Study of Labor (IZA) (Deceased)

Markus Grabka

German Institute for Economic Research (DIW Berlin)

Eva Sierminska

LISER; DIW Berlin - German Socio-Economic Panel Study (SOEP); IZA Institute of Labor Economics

Date Written: February 2007

Abstract

The definition and operationalization of wealth information in population surveys and the corresponding microdata requires a wide range of more or less normative assumptions. However, the decisions made in both the pre- and post-data-collection stage may interfere considerably with the substantive research question. Looking at wealth data from the German SOEP, this paper focuses on the impact of collecting information at the individual rather than household level, and on imputation and editing as a means of dealing with measurement error. First, we assess how the choice of unit of aggregation or unit of analysis affects wealth distribution and inequality analysis. Obviously, when measured in per capita household terms, wealth is less unequally distributed than at the individual level. This is the result of significant redistribution within households, and also provides evidence of a significant persisting gender wealth gap. Secondly, we find multiple imputation to be an effective means of coping with selective nonresponse. There is a significant impact of imputation on the share of wealth holders (increasing on average by 15%) and also on aggregate wealth (plus 30%). However, with respect to inequality, the results are ambiguous. Looking at the major outcome variable for the whole population-net worth-the Gini coefficient decreases, whereas a top-sensitive measure doubles. The non-random selectivity built into the missing process and the consideration of this selectivity in the imputation process clearly contribute to this finding. Obviously, the treatment of measurement errors after data collection, especially with respect to the imputation of missing values, affects cross-national comparability and thus may require some cross-national harmonization of the imputation strategies applied to the various national datasets.

Keywords: Wealth, Item Non-response, Multiple Imputation, SOEP

JEL Classification: D31, C81, I32

Suggested Citation

Frick, Joachim R. and Grabka, Markus and Sierminska, Eva, Representative Wealth Data for Germany from the German SOEP: The Impact of Methodological Decisions Around Imputation and the Choice of the Aggregation Unit (February 2007). SOEP Paper No. 3, Available at SSRN: https://ssrn.com/abstract=1092784 or http://dx.doi.org/10.2139/ssrn.1092784

Joachim R. Frick (Contact Author)

German Institute for Economic Research (DIW Berlin) (Deceased) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Institute for the Study of Labor (IZA) (Deceased)

P.O. Box 7240
Bonn, D-53072
Germany

Markus Grabka

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstrasse 58
SOEP
D-10117 Berlin
Germany
+49-30-89789-339 (Phone)
+49-30-89789-109 (Fax)

Eva Sierminska

LISER ( email )

3, avenue de la Fonte
Esch-sur-Alzette, L-4364
Luxembourg

HOME PAGE: http://www.sierminska.eu

DIW Berlin - German Socio-Economic Panel Study (SOEP)

Mohrenstraße 58
Berlin, 10117
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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