Does Repeated Measurement Improve Income Data Quality?

Abstract

This paper exploits a natural experiment created by a survey design to show that the quality of income data systematically changes across waves of a panel. We estimate that the effect of being interviewed for a second time, relative to the first, is to increase mean monthly income by 8%. Dependent interviewing – a recall device commonly used in panel surveys – explains one third of the observed increase. The remaining share is attributed to changes in respondent behaviour (panel conditioning). We review the evidence for and against a reporting improvement vs. a behavioural response by survey participants.