FISCAL STUDIES, vol. 39, no. 2, pp. 213–240 (2018) 0143-5671
Survey Under-Coverage of Top Incomes and
Estimation of Inequality: What is the Role of
the UK’s SPI Adjustment?
†University of Texas at Austin; University of Melbourne
‡University of Melbourne
§London School of Economics; ISER (University of Essex); University of Melbourne;
IZA (Institute of Labor Economics)
♦University of Melbourne
Survey under-coverage of top incomes leads to bias in survey-based estimates
of overall income inequality. Using income tax record data in combination
with survey data is a potential approach to address the problem; we consider
here the UK’s pioneering ‘SPI adjustment’ method that implements this idea.
Since 1992, the principal income distribution series (reported annually in
Submitted December 2016.
This research is supported by an Australian Research Council Discovery Grant (award DP150102409).
Jenkins’s research is also partially supported by core funding of the Research Centre on Micro-Social
Change at the Institute for Social and Economic Research (ISER) by the University of Essex and the UK
Economic and Social Research Council (award ES/L009153/1). For helpful discussions about the HBAI
data and SPI adjustments, the authors thank Peter Matejic and his DWP colleagues and Jeremy Reuben from
HMRC’s SPI team. They also gratefully acknowledge the perceptive comments of the three anonymous
Keywords: inequality, income inequality, survey under-coverage, SPI adjustment, top incomes, tax return
data, survey data.
JEL classiﬁcation numbers: D31, C81.
2017 The Authors. Fiscal Studies published by John Wiley & Sons Ltd. on behalf of Institute for Fiscal Studies.
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