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ESTIMATING THE INEQUALITY OF HOUSEHOLD INCOMES: A STATISTICAL APPROACH TO THE CREATION OF A DENSE AND CONSISTENT GLOBAL DATA SET
Author(s) -
Galbraith James K.,
Kum Hyunsub
Publication year - 2005
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2005.00147.x
Subject(s) - squire , inequality , set (abstract data type) , economics , data set , econometrics , panel data , economic inequality , construct (python library) , statistics , mathematics , computer science , geography , mathematical analysis , archaeology , programming language
The deficiencies of the Deininger and Squire data set on household income inequality are well known to include sparse coverage, problematic measurements, and the combination of diverse data types into a single data set. Yet many studies have relied on this data due to the lack of available alternatives. In this paper we show how the UTIP‐UNIDO measures of manufacturing pay inequality can be used, with other information, to estimate measures of household income inequality. We take advantage of the systematic relationship between the UTIP‐UNIDO estimates and those of Deininger and Squire. The residuals from this exercise provide a map to problematic observations in the Deininger and Squire data, and the estimated coefficients provide a way to construct a new panel data set of estimated household income inequality. This new data set provides comparable and consistent measurements across space and through time.