Do expenditures explain income? A study of variables for income imputation

Abstract

Income data in the U.S. Consumer Expenditure Survey are subject to nonresponse. Model-based imputation is being explored to diminish missing data problems. Since income is an important variable in predicting expenditures, might expenditures be useful in predicting incomes? Incomes from wages and salaries and self-employment are modeled. These results are compared to regressions on demographic characteristics alone. Although each expenditure category adds to the predictive power of the model, total expenditures adds the most.