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WP202206-Measuring-top-income-shares-in-the-UK.pdf
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This paper examines measurement error in the share of income going to the top 1% (and other subgroups) that comes from estimation of the denominator. We compare two approaches. First, the default ‘external’ approach used in the current literature, which relies on different data sources for the numerator and denominator. Second, an alternative ‘augmented internal’ approach that uses the same data source for the denominator as for the numerator, but augments this to fill gaps in coverage. We set out four principled criteria for selecting between these approaches and argue that the ‘augmented internal’ approach is to be preferred. On this approach, the UK top 1% share is 2 percentage points higher than under the alternative ‘external’ approach.
Authors
Research Fellow University of Warwick
Arun is a Research Fellow at IFS, an Associate Professor of Economics at the University of Warwick and a Commissioner at the Wealth Tax Commission.
Research Fellow London School of Economics
Andy Summers is an Associate Professor of Law at the London School of Economics and an Associate of the International Inequalities Institute at LSE.
Hannah Tarrant
Working Paper details
- DOI
- 10.1920/wp.ifs.2022.0622
- Publisher
- Institute for Fiscal Studies
Suggested citation
A, Advani and A, Summers and H, Tarrant. (2022). Measuring top income shares in the UK. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/measuring-top-income-shares-uk (accessed: 4 November 2024).
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