Stata command: bfmcorr

Features

• Reweights observations in the survey, enforces consistency with the tax data, and replaces observations at the top of the distribution to increase precision.

• Automatically determines the “merging point” between the tax and the survey data, and extrapolates the shape of the nonresponse function if the tax data does not cover a large enough fraction of the distribution.

• Can maintain the survey's representativeness in terms of other sociodemographic variables (age, gender, etc.)

• Preserves survey microdata, including the household structure, assuming no reranking of observations.

• Can use tax data with different statistical units (households or individuals).

• Can work with two different income variables: a comprehensive income variable assumed to drive nonresponse in the survey, and a taxable income variable that corresponds to the tax data.

• Can correct the survey to also match the composition of income by income bracket (eg. share of labor vs. capital) and/or the composition of the population by income bracket (eg. frequency of men vs. women).

• Provides several diagnostic tools to analyse the correction.

Example

See the file example for a complete illustration of the method with Brazilian data for 2014.

bfmcorr using "$dir_dta/gpinter-brazil-2014.xlsx", ///

  weight(person_weight) income(yhh) households(hid) ///

  taxu(i) trust(0.8) holdmargins(age_group male)

// Show the shape of the bias

postbfm biasplot

// Compare the Lorenz curves before and after correction

postbfm lorenz