savings greater than income
working on the BHPS I noticed that there is a lot of observation which show annual saving (amount saved each month * 12) is greater than total annual income (fiyr). Most of these people are originally from the U.K. ( so remittance can be excluded) and not all of them are married. Such problem is present even if I reduce the sample to people older than 40.
Do you have an explanation for this evidence? I assumed that "fiyr" contained all the possible sources of income.
Updated by Redmine Admin over 7 years ago
- % Done changed from 0 to 50
I have received the following advice:
It is correct that there are a few hundred cases like this. Two suggestions for explanations are: a) income estimates do not include within household transfers and the saving may be from such transfers; in the great majority of cases individual saving is substantially less than total household income, and b) there will be significant measurement error around both estimates, and in these cases either savings are overestimated or income is underestimated.
On behalf of the team, Jakob