Survey mode effects on measured income inequality

Abstract

We study the effect of interview modes on estimates of economic inequality which are based on survey data. We exploit variation in interview modes in the Austrian EU-SILC panel, where between 2007 and 2008 the interview mode was switched from personal interviews to telephone interviews for some but not all participants. We combine methods from the program evaluation literature with methods from the distributional decomposition literature to obtain causal estimates of the effect of interview mode on estimated inequality. We find that the interview mode has a large effect on estimated inequality, where telephone interviews lead to a larger downward bias. The effect of the mode is much smaller for robust inequality measures such as interquantile ranges, as these are not sensitive to the tails of the distribution. The magnitude of effects we find are of a similar order as the differences in many international and intertemporal comparisons of inequality.