Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/298324 
Year of Publication: 
2023
Series/Report no.: 
Discussion Papers No. 1000
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
The expenditure method of Pissarides and Weber (1989) [Journal of Public Economics, 39 (1), 17- 32) shows how one backs out measure of income underreporting by the self-employed by using food consumption as trace of true income. In this paper we make a case for using panel data and fixed effects estimation in such analysis, instead of OLS estimation. The main argument is that fixed effects estimation addresses the problem of omitted variable bias in the identification. We demonstrate the use of panel data and fixed effects estimation by using large scale administrative register data on charitable donations, exploiting that the data can be turned into a panel dataset. The results suggest that the estimation technique matters - fixed effects estimates are smaller than OLS estimates.
Subjects: 
Income underreporting
register data
expenditure approach
fixed effects estimation
JEL: 
H26
E21
E26
C55
Document Type: 
Working Paper

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