Effect of Systematic Misperception of Income on the Subjective Poverty Line

摘要

Heads of households appear to misperceive their own household income. The misperception of income can be easily assessed, but also asks for some adjustment of the answers to subjective questions where household income serves as a frame of reference. The appropriate extent of adjustment can be estimated. However, it seems more natural to explain the unadjusted answers directly by both misperceived income and accurately measured income. The results show that adjustment of the answer to the so-called Minimum Income Question proportionate to the income misperception, causes an overestimation of the related Subjective Poverty Line for a one-person household and less pronounced household composition effects. The results, from estimated correction and in the case of direct use of misperceived income, are similar.