Assessing Asset Data on Low-Income Households - Urban Institute

I. INTRODUCTION
The lack of quality data has been a long-standing concern among researchers in studying assets.
Except for the 1962 Survey of Financial Characteristics of Consumers, no serious efforts were
made to collect reliable asset data before the 1980s. In 1983, the Survey of Consumer Finances
(SCF) and the Survey of Income and Program Participation (SIPP) were the first to ask
respondents detailed questions about asset holdings. Another major data set, the Panel Study of
Income Dynamics (PSID) added a wealth supplement in 1984 (Spilerman 2000). The availability
of data on assets stimulated asset research and increased interest in asset-building policies as an
anti-poverty strategy and in studying the widening economic gaps since the 1980s (Sherraden
2001; Spilerman 2000). With available data, researchers started to examine the distribution of
assets, test theoretical models and hypotheses, and develop new concepts and theories on assets.
To guide future research in assets, this report addresses the following questions:
• What are the most informative and reliable data sources for understanding lowincome
households’ assets and liabilities?
• What are the limitations of these data sources?
• What are the means for improving asset data?
We identify 12 data sets that have the potential to provide valuable information in
studying the assets of low-income households. We evaluate these data sets with four criteria:
relevancy, representativeness, recurrence, and richness of correlates. Although we pay special
attention to each data set’s ability to provide information on assets (relevancy) among the lowincome
population (representativeness) over time (recurrence), we also consider the correlates
data sets provide (richness of correlates) and thus their ability to answer other important research
questions, such as the effects of assets on outcomes. Based on these four criteria, we conclude
that three data sets have the greatest potential for future asset research: the Survey of Consumer
Finances (SCF), the Survey of Income and Program Participation (SIPP), and the Panel Study of
Income Dynamics (PSID).
Below we discuss the criteria for evaluating data sources, followed by an overview of the
data sets identified and the criteria they meet. Next, we provide details of the three primary data
sets, along with a discussion of each data set’s strengths and weaknesses. Finally, we present
options for improving the scope and quality of the primary asset data sets.
II. CRITERIA FOR EVALUATING ASSET RELATED DATA SOURCES
To identify the most informative and reliable data sources for understanding low-income
households’ assets (financial and nonfinancial tangible), we establish four evaluation criteria.
These criteria are used to assess the surveys’ overall relevance and potential for answering our
research questions. We use the information gathered from these assessments to explore ways to
modify the data sets to best meet these criteria. The criteria are:
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