concept (say, income) be measured on a per capita basis or per equivalent adult? If an equivalence scale is used, which one should be preferred? If an income concept is used, is it an estimate of monetary income only, or does it include auto-consumption and imputed rent – to name just two? Are adjustments made to the microdata to correct for underreporting, to eliminate outliers, or to address missing responses? Panel A of Table 2 summarizes the answers to some of these questions for the microdata-based data sets.

# _Group 1: Microdata-based Data Sets_

Database producers and compilers do not make these decisions in a vacuum. Researchers have been working to develop common standards for the measurement of individual income and welfare since at least the 1970s (United Nations, 1977). Today the most widely used standard is the _Canberra Group Handbook on Household Income Statistics_ (United Nations Commission for Europe, 2011). The Canberra Group Handbook standardizes definitions of income components and aggregates, and provides best practices for measurement, quality assurance, dissemination, and analysis. The first iteration of the Canberra Group convened from December 1996 to May 2001 and included representatives of LIS, OECD, ECLAC, the World Bank and a large number of national statistics bureaus. This series of meetings led to the production of the first edition of the Handbook in 2001. The 2011 Handbook update was authored by a ‘Task Force’ that included representatives of both OECD and LIS. The _OECD Framework for Statistics on the Distribution of Household Income, Consumption and Wealth_ (2013) expands upon this work to include standards for measuring the distributions of consumption and wealth.

Indeed the OECD’s IDD explicitly standardizes its income definitions to that of the Canberra Handbook. CEPALSTAT, SEDLAC, and LIS also appear to be influenced by this standardization effort (CEPALSTAT and LIS provide links to the Canberra Handbook on their websites), although they are less explicit about the extent to which they adhere to the guidelines. Differences arise, however, because the underlying surveys differ by country and year, and the microdata itself is imperfect. The result is that, in pursuing standardization, most data set providers must inevitably make some choices between (internal) accuracy and (cross-country) comparability.

Table 2 also compares adjustment and harmonization procedures. These include the treatment of potentially under-reported income; imputation of rents saved by homeowners; treatment of topcoding in survey data; the treatment of autoconsumption; categorizing taxes and transfers; the treatment of domestic servants and lodgers; the choice between monthly or annual estimates; and adjustments made for inflation. CEPALSTAT, SEDLAC, and LIS use a constant methodology across all countries and years, working directly with the microdata. The IDD and WDI/ PovcalNet on the other hand, adapt the choices to the microdata that are available.

For those data sets built directly from the microdata, we note another dimension on which they can be examined. The efforts, either ex-post or ex-ante, to create harmonized microdata can be categorized as those for whom harmonization is the primary concern, and those for whom harmonization is only part of the process of developing comparable indicators. For LIS and SEDLAC, the creation of 10