Rounding of income data

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A small percentage of SLID income data comes from data collected in a telephone interview. While data obtained from the tax file is thought to be consistent for the most part, the quality of data coming from collection is not known. While some respondents may give precise amounts, it is possible that many of the responses given are estimates or approximations, which therefore are stated in hundreds or thousands of dollars rather than precise dollars and cents.

To test for the possible presence of rounding, distributions of each of the last 4 digits of reported variables were produced. One would normally expect the distribution to be approximately uniform with the digits 0 to 9 each comprising about 10 percent of the distribution. A prevalence of zeroes in the last digit would indicate rounding to the nearest 10, in the second last digit rounding to 100, etc. Table 9.1 shows the distribution of each of these digits for all reported values greater than ten thousand of the variable wages and salaries from both collected data (e.g. collected by interview) and tax data. Table 9.2 shows the prevalence of zeroes in each of the last 4 digits for all reported nonzero values for a selection of SLID variables.

Table 9.1 Distribution of the last four digits of wages and salaries greater than $9.999 in 2006 (%)Table 9.1 Distribution of the last four digits of wages and salaries greater than $9.999 in 2006 (%)

Table 9.2 Prevalence of zeroes in the last four digits of 2006 reported dataTable 9.2 Prevalence of zeroes in the last four digits of 2006 reported data