Is Inequality Underestimated in Egypt? Evidence from House Prices
Household income surveys often fail to capture top incomes which leads to an underestimation of income inequality. A popular solution is to combine the household survey with data from income tax records, which has been found to result in significan...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/06/26514568/inequality-underestimated-egypt-evidence-house-prices http://hdl.handle.net/10986/24645 |
| Summary: | Household income surveys often fail to
capture top incomes which leads to an underestimation of
income inequality. A popular solution is to combine the
household survey with data from income tax records, which
has been found to result in significant upward corrections
of inequality estimates. Unfortunately, tax records are
unavailable in many countries, including most of the
developing world. In the absence of data from tax records,
this study explores the feasibility of using data on house
prices to estimate the top tail of the income distribution.
In an application to Egypt, where estimates of inequality
based on household surveys alone are low by international
standards, the study finds strong evidence that inequality
is indeed being underestimated by a considerable margin. The
Gini index for urban Egypt is found to increase from 36 to
47 after correcting for the missing top tail. |
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