Measuring income inequality
Every year, the U.S. Census Bureau conducts an income survey of about 60,000 American families that are carefully selected to represent the whole population. The data collected are used to measure income inequality.
Which of the following is a reason that census data may overstate income inequality?
A) Census figures record after-tax rather than before-tax income.
B) Census data count all cash and noncash transfers as income.
C) In-kind transfers, such as food stamps, Medicaid, and housing assistance, are not counted as income.