Question

Biases in wealth surveys?

A survey of Canadian families yielded average ‘equity’ (i.e. total owned in real estate, bonds, stocks, etc. minus total owed) of $48,000. Aggregate government data of the total equity in the Canadian population shows that this figure must be much larger, in fact more than twice as large. This shows that respondents much tend to dramatically underreport their equity.

Statement true, false or does its truth depend on unstated conditions?

Explain why. In the last case, on what conditions does it depend on and how?

Answer 1

Yes, given statement is true. There are biases exist in wealth surveys. We know that peoples do not respond properly to the survey questions if they feel insecure. Also, there would be different reasons for not providing the correct or unbiased responses from respondents. In wealth surveys, peoples do not want to explore their real wealth or they underreport the figures of their wealth. Peoples or families have fear regarding the taxes on their wealth by government. If they explore the real figures of their property, they had a fear of filling more taxes. Respondents tend to dramatically underreport their equity. Due to these types of responses, there are biases in wealth surveys and results from these types of surveys are also biased. We could not use these results or estimates for further use. Also, it is found that so many people don’t like to discuss their wealth data or corresponding information regarding wealth survey.