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Comparison of Approaches to Measuring the Causes of Income Inequality

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  • Satimanon, Monthien
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    Abstract

    Most of the inequality literature in the United States and developing countries has focused on education and fringe benefit provided by government as determinants of income inequality. The partial effect (sign, magnitude, and significance) of education on the measure of income inequality depends not only on the return to education but also position of unit of observation on the upper and lower tail of income distribution. In the recent development literature, it has been pointed out that there exists the endogeneity issue regarding the causality of income inequality and education attainment. Hence, the estimating results of partial effect might be inconsistent. Taking advantages of the newly developed quantile regression with control function, this study compares the result from conventional estimation to the results of this new estimation method.

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    Bibliographic Info

    Paper provided by Agricultural and Applied Economics Association in its series 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania with number 103844.

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    Date of creation: 24 Jul 2011
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    Handle: RePEc:ags:aaea11:103844

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    Keywords: Consumer/Household Economics;

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    1. Frölich, Markus, 2002. "Nonparametric IV Estimation of Local Average Treatment Effects with Covariates," IZA Discussion Papers 588, Institute for the Study of Labor (IZA).
    2. Frölich, Markus & Melly, Blaise, 2008. "Unconditional Quantile Treatment Effects under Endogeneity," IZA Discussion Papers 3288, Institute for the Study of Labor (IZA).
    3. Markus Frolich & Blaise Melly, 2010. "Estimation of quantile treatment effects with Stata," Stata Journal, StataCorp LP, vol. 10(3), pages 423-457, September.
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