Self-reported income data: are people telling the truth?
| DOI | https://doi.org/10.1108/JFC-08-2019-0113 |
| Pages | 1349-1359 |
| Date | 03 February 2020 |
| Published date | 03 February 2020 |
| Author | Fernando Antonio Ignacio González |
| Subject Matter | Financial risk/company failure,Accounting & Finance |
Self-reported income data: are
people telling the truth?
Fernando Antonio Ignacio González
Department ofEconomy, Instituto de Investigaciones Económicas y Sociales delSur,
UNS/CONICET,Bahia Blanca, Argentina
Abstract
Purpose –This paper aims to detect anomalous data in income reportsof Argentina, including personal
income –froma sample of households –and statements of public officials.
Design/methodology/approach –A widely known technique in forensic accounting –such as
Benford’sLaw–isused. The Chi-square test and the absolute mean deviation are used for verification.
The databases consulted include the income declared by households in the Per manent Household
Survey –for the 2003-2017 period –and the capital declarations of high-ranking public officials –for the
period 1999-2017.
Findings –The results suggest that income reportedin the Encuesta Permanente de Hogares do not follow
a Benford¨sdistribution, and the degree of conformity with this decreases significantly between 2007 and
2015 –coincident with the interventionperiod of the Instituto Nacional de Estadísticas y Censos. Patrimonial
statements of public officialspresent an acceptable level of compliance with Benford’s law, especially among
those of the legislative branch(in more than 90% of cases) although to a lesser extent among officials of the
executivebranch.
Practical implications –The results suggest that income reports from the Permanent Household
Survey, for the period 2007-2015, should be used with reservations because of their possible
manipulation.
Originality/value –During the interventionof the official statisticsinstitute in Argentina (2007-2015), the
idea of lack of credibilityof its reports has been disseminated. To date,however, there is no empirical evidence
to supportit related to income.
Keywords Income, Patrimonial statements, Benford’s law
Paper type Research paper
1. Introduction
Information from householdsurveys is widely used by researchers in social sciencesand, in
particular, that referring to household income is of special relevance in topics, such as
poverty, inequality or growth. Thus, the availability of quality information, free of bias, is
essential as supportfor research.
In recent years, household surveys, carried out by national statistical institutes, have
proliferated in Latin America as means of data collection. These micro-data allow to know
various aspects of individuals or households included in the sampling and are, at present,
the main source of official estimates of the incidence of poverty and indigence, Gini
coefficient, unemployment and activityrates –among others –in countries of the region. In
particular, Argentina has an extensive tradition in conducting national household surveys:
the Encuesta Permanente de Hogares (EPH, Permanent Household Survey in English) has
been carried out since 1973 and, at present, is carried out on a quarterly basis covering 31
urban agglomerates.
Information referring to income–personal or from household –has re ceived special
attention, not only because of its importance on estimations, but also because of the
Self-reported
income data
1349
Journalof Financial Crime
Vol.27 No. 4, 2020
pp. 1349-1359
© Emerald Publishing Limited
1359-0790
DOI 10.1108/JFC-08-2019-0113
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