One of the more exciting sessions I went to at the recent Centre for the Study of African Economies Conference was on the relationship between agricultural plot size and productivity. I walked out of the session not sure of the shape of the relationship, but I was sure of the fact that there is a lot of measurement error going on. And this is measurement error that matters a lot.
The self-employed often underreport income to tax authorities. Less is known about how trustworthy the income reported on household surveys is, but there is a concern that they may also underreport their income in surveys too – either because of concerns about it getting linked to official records, or because the easiest number for them to report is the one they tell the authorities. This raises obvious concerns about the measurement of items such as the poverty levels of the unemployed, the differential income gap between wage work and self-employment, and many other such uses.