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The Influence of Aggregation on the Ordering of Distributions

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  • Howes, Stephen

Abstract

Researchers often compare distributions using some criterion or other of inequality, poverty, or welfare. It is standard practice to base such comparative analysis on aggregated data. But will the results obtained be dependent on the degree of aggregation of the data? This paper argues, on the basis of a simulation study, that they will be, since the probability of obtaining a ranking can increase rapidly with the degree of aggregation. Aggregation exaggerates the differences between similar distributions and overlooks crossings at the lower tail. A change in research strategy is warranted: aggregation should be avoided where possible. Copyright 1996 by The London School of Economics and Political Science.

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Bibliographic Info

Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 63 (1996)
Issue (Month): 250 (May)
Pages: 253-72

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Handle: RePEc:bla:econom:v:63:y:1996:i:250:p:253-72

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Cited by:
  1. André Decoster & Erwin Ooghe, 2002. "Weighting with individuals, equivalent individuals, or not weighting at all. Does it matter empirically?," Public Economics Working Paper Series ces0215, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Working Group Public Economics.
  2. Allanson, Paul & Hubbard, Lionel, 1999. "On the Comparative Evaluation of Agricultural Income Distributions in the European Union," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 26(1), pages 1-17, March.
  3. repec:dun:dpaper:93 is not listed on IDEAS
  4. Frank A Cowell & Maria-Pia Victoria-Feser, 2001. "Distributional Dominance with Dirty Data," STICERD - Distributional Analysis Research Programme Papers 51, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  5. Barbara Dluhosch, 1997. "Convergence of Income Distributions: Another Measurement Problem," Constitutional Political Economy, Springer, vol. 8(4), pages 337-352, December.
  6. Cowell, Frank A. & Victoria-Feser, Maria-Pia, 2006. "Distributional Dominance With Trimmed Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 24, pages 291-300, July.
  7. Martino, Gaetano & Polinori, Paolo, 2010. "The individual contribution to income inequality: conceptual analysis and empirical investigation," MPRA Paper 34365, University Library of Munich, Germany.

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