For most surveys, the reporting of transfer program income is a two-stage process in which respondents first report recipiency (or not) of a particular form of income and then, among those who report recipiency, the amount of the income. One shortcoming of many studies that assess response error associated with transfer program income is the design of the study, in which the sample for the study is drawn from those known to be participants in the program. Responses elicited from respondents then are verified with administrative data. Retrospective or reverse record check studies limit the assessment of response error, with respect to recipiency, to determining the rate of underreporting; prospective or forward record check studies that only verify positive recipiency responses are similarly flawed because by design they limit the assessment of response error only to overreports. In contrast, a "full" design permits the verification of both positive and negative recipiency responses and includes in the sample a full array of respondents. Validation studies that sample from the general population and link all respondents, regardless of response, to the administrative record of interest represent full study designs.
We focus our attention first on reporting of receipt of a particular transfer program. Among full design studies, there does appear to be a tendency for respondents to underreport receipt, although there are also examples of overreporting recipiency status. For example, Oberheu and Ono (1975) report a low correspondence between administrative records and household report for receipt of Aid to Families with Dependent Children (AFDC)--monthly and annual--and food stamps (disagreement rates exceeding 20 percent), but relatively low net rates of underreporting and overreporting. Underreporting of the receipt of general assistance as reported in two studies is less than 10 percent (e.g., David, 1962). In a study reported by Marquis and Moore (1990), respondents were asked to report recipiency status for 8 months (in two successive waves of Survey of Income and Program Participation [SIPP] interviews). Although Marquis and Moore report a low error rate of approximately 1 percent to 2 percent, the error rate among true recipients is significant, in the direction of underreporting. For example, among those receiving AFDC, respondents failed to report receipt in 49 percent of the person-months. Underreporting rates were lowest among Old-Age and Survivors Insurance and Disability Insurance (OASDI) beneficiaries, for which approximately 5 percent of the person-months of recipiency were not reported by the household respondents. The mean rates of participation based on the two sources differed by less than 1 percentage point for all income types. However, because some of these programs are so rare, small absolute biases mask high rates of relative underreporting among true participants, ranging from +1 percent for OASDI recipiency to nearly 40 percent for AFDC recipiency. In a followup study, Moore et al. (1996) compared underreporting rates of known recipients to overreporting rates for known nonrecipients and found underreporting rates to be much higher than the rate of false positives by nonrecipients. They also note that underreporting on the part of known recipients tends to be due to failure to ever report receipt of a particular type of income rather than failure to report specific months of receipt.
In contrast, Yen and Nelson (1996) found a slight tendency among AFDC recipients to overreport receipt in any given month, such that estimates based on survey reports exceeded estimates based on records by approximately 1 percentage point. Oberheu and Ono (1975) also note a net overreporting for AFDC (annual) and food stamp recipiency (annual), of 8 percent and 6 percent, respectively. Although not investigated by these researchers, one possible explanation for apparent overreporting on the part of the respondent is confusion concerning the source of recipiency, resulting in an apparent overreporting of one program coupled with an underreporting of another program. Because many of the validity studies that use administrative records to confirm survey reports are limited to verification of one or two particular programs, most response error investigations have not addressed this problem.
Errors in the reporting of recipiency for any given month may be attributable to misdating the beginning and end points of a spell, as opposed to an error of omission or confusion concerning the source of support. The "seam effect" refers to a particular type of response error resulting from the misdating of episodic information in panel data collection efforts (Hill, 1987). A seam effect is evident when a change in status (e.g., from receipt of AFDC to nonreceipt of AFDC) corresponds to the end of a reference period for Wave x and the beginning of a reference period for Wave x+1. For example, a respondent may report receipt of AFDC at the end of the first wave of interviewing; at the time of the second wave of interviewing, he or she reports that no one in the family has received such benefits for the entire reference period. Hence it appears (in the data) as if the change in status occurred on the day of the interview.
With respect to the direction and magnitude of estimates concerning the amount of the transfer, empirical investigations vary in their conclusions. Several studies report a significant underreporting of assistance amount (e.g., David, 1962; Livingston, 1969; Oberheu and Ono, 1975; Halsey, 1978) or significant differences between the survey and record reports (Grondin and Michaud, 1994). Other studies report little to no difference in the amount based on the survey and record reports. Hoaglin (1978) found no difference in median response error for welfare amounts and only small negative differences in the median estimates for monthly Social Security income. Goodreau et al. (1984) found that 65 percent of the respondents accurately report the amount of AFDC support; the survey report accounted for 96 percent of the actual amount of support. Although Halsey (1978) reported a net bias in the reporting of unemployment insurance amount of -50 percent, Dibbs et al. (1995) conclude that the average household report of unemployment benefits differed from the average true value by approximately 5 percent ($300 on a base of $5,600).
Schaeffer (1994) compared custodial parents' reports of support owed and support paid to court records among a sample of residents in the state of Wisconsin. The distribution of response errors indicated significant underreporting and overreporting of both the amount owed and the amount paid. The study also examined the factors contributing to the absolute level of errors in the reports of amounts owed and paid; the findings indicate that the complexity of the respondent's support experience had a substantial impact on the accuracy of the reports. Characteristics of the events (payments) were more important in predicting response error than characteristics of the respondent or factors related to memory decay. The analysis suggests two areas of research directed toward improving the reporting of child support payments: research related to improving the comprehension of the question (specifically clarifying and distinguishing child support from other transfer payments) and identifying respondents for whom the reporting process is difficult (e.g., use of a filter question) with follow-up questions specific to the behavioral experience.