False Negatives? Earnings Underreporting, Tax Overreporting in Surveys Worldwide

Incomes in household surveys are subject to various reporting and measurement issues biasing the static and dynamic assessments of inequality and poverty (Ceriani et al. 2022; Hlasny et al. 2022). Some households under/over-report their earnings or liabilities, fail to respond to questions about some sources of income, or are excluded entirely through their own choice or through decisions of statistical agencies or survey aggregators.
In contrast to tax registries, we may not expect income underreporting on household surveys, given that households have little to gain from lying or making themselves look poor in front of survey enumerators. Nevertheless, tallying all earnings and losses over the span of a survey period can be daunting, and reporting public assistance such as food stamps may be embarrassing, so some income sources of the rich and poor alike may be left out. Since truthful reporting on surveys cannot be ascertained or legally enforced, misreporting may be even more rampant in surveys than in tax records (Higgins et al. 2018) (...)