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The Construction and Interpretation of Combined Cross-Section and Time-Series Inequality Datasets

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Author Info
Joseph Francois () (Johannes Kepler University (Linz))
Hugo Rojas-Romagosa () (CPB (the Hague))

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Abstract

The inequality dataset compiled in the 1990s by the World Bank and extended by the UN has been both widely used and strongly criticized. The criticisms raise questions about conclusions drawn from secondary inequality datasets in general. We develop techniques to deal with national and international comparability problems intrinsic to such datasets. The result is a new dataset of consistent inequality series, allowing us to explore problems of measurement error. In addition, the new data allow us to perform parametric non-linear estimation of Lorenz curves from grouped data. This in turn allows us to estimate the entire income distribution, computing alternative inequality indexes and poverty estimates. Finally, we have used our broadly comparable dataset to examine international patterns of inequality and poverty.

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Paper provided by Institue for International and Development Economics in its series IIDE Discussion Papers with number 20070805.

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Length: 64 pages
Date of creation: Aug 2007
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Handle: RePEc:lnz:wpaper:20070805

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Related research
Keywords: Income distribution datasets inequality trends Lorenz curve estimation poverty estimation

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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  3. Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March. [Downloadable!] (restricted)
  4. Kakwani, N C & Podder, N, 1973. "On the Estimation of Lorenz Curves from Grouped Observations," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(2), pages 278-92, June. [Downloadable!] (restricted)
  5. Ravallion, Martin & Datt, Gaurav & van de Walle, Dominique, 1991. "Quantifying Absolute Poverty in the Developing World," Review of Income and Wealth, Blackwell Publishing, vol. 37(4), pages 345-61, December.
  6. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank. [Downloadable!]
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  7. Kakwani, Nanak C & Podder, N, 1976. "Efficient Estimation of the Lorenz Curve and Associated Inequality Measures from Grouped Observations," Econometrica, Econometric Society, vol. 44(1), pages 137-48, January. [Downloadable!] (restricted)
  8. Xavier Sala-i-Martin, 2002. "The World Distribution of Income (estimated from Individual Country Distributions)," NBER Working Papers 8933, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Jean-Marc Burniaux & Thai-Thanh Dang & Douglas Fore & Michael Förster & Marco Mira d'Ercole & Howard Oxley, 1998. "Income Distribution and Poverty in Selected OECD Countries," OECD Economics Department Working Papers 189, OECD Economics Department. [Downloadable!]
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  11. Sarabia, J. -M. & Castillo, Enrique & Slottje, Daniel J., 1999. "An ordered family of Lorenz curves," Journal of Econometrics, Elsevier, vol. 91(1), pages 43-60, July. [Downloadable!] (restricted)
  12. Xavier Sala-i-Martin, 2002. "The Disturbing "Rise" of Global Income Inequality," NBER Working Papers 8904, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Rasche, R H, et al, 1980. "Functional Forms for Estimating the Lorenz Curve: Comment," Econometrica, Econometric Society, vol. 48(4), pages 1061-62, May. [Downloadable!] (restricted)
  14. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September. [Downloadable!] (restricted)
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  15. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September. [Downloadable!] (restricted)
  16. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," World Bank Economic Review, Oxford University Press, vol. 11(2), pages 357-82, May.
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  17. Datt, Gaurav, 1998. "Computational tools for poverty measurement and analysis," FCND discussion papers 50, International Food Policy Research Institute (IFPRI). [Downloadable!]
  18. Ortega, P, et al, 1991. "A New Functional Form for Estimating Lorenz Curves," Review of Income and Wealth, Blackwell Publishing, vol. 37(4), pages 447-52, December.
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  21. Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998. "Explaining International and Intertemporal Variations in Income Inequality," Economic Journal, Royal Economic Society, vol. 108(446), pages 26-43, January. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Leandro Prados de la Escosura, 2006. "Growth, Inequality, and Poverty in Spain, 1850-2000: Evidence and Speculation," Working Papers in Economic History wp06-04, Universidad Carlos III, Departamento de Historia Económica e Instituciones. [Downloadable!]
  2. Carmen Fillat & Joseph Francois, 2004. "National and International Income Dispersion and Aggregate Expenditures," Tinbergen Institute Discussion Papers 04-093/2, Tinbergen Institute. [Downloadable!]
  3. Martin Gassebner & Noel Gaston & Michael Lamla, 2006. "Relief for the Environment? The Importance of an Increasingly Unimportant Industrial Sector," Working papers 06-130, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
    Other versions:
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