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

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  • Joseph Francois

    ()
    (Johannes Kepler University (Linz))

  • Hugo Rojas-Romagosa

    ()
    (CPB (the Hague))

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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Bibliographic Info

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
Date of revision:
Handle: RePEc:lnz:wpaper:20070805

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Keywords: Income distribution datasets; inequality trends; Lorenz curve estimation; poverty estimation;

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  1. 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.
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  8. Xavier Sala-i-Martin, 2002. "The world distribution of income (estimated from individual country distributions)," Economics Working Papers 615, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2002.
  9. Datt, Gaurav, 1998. "Computational tools for poverty measurement and analysis," FCND discussion papers 50, International Food Policy Research Institute (IFPRI).
  10. 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.
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  16. Shorrocks, Anthony F, 1983. "Ranking Income Distributions," Economica, London School of Economics and Political Science, vol. 50(197), pages 3-17, February.
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  18. Ravallion, Martin & Datt, Gaurav & van de Walle, Dominique, 1991. "Quantifying Absolute Poverty in the Developing World," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(4), pages 345-61, December.
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  21. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
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Cited by:
  1. Thomas Goda, 2013. "Changes in income inequality from a global perspective: an overview," Working Papers PKWP1303, Post Keynesian Economics Study Group (PKSG).
  2. Martin Gassebner & Noel Gaston & Michael J Lamla, 2008. "Relief For The Environment? The Importance Of An Increasingly Unimportant Industrial Sector," Economic Inquiry, Western Economic Association International, vol. 46(2), pages 160-178, 04.
  3. Rabindra Bhandari & Gyan Pradhan & Mukti Upadhyay, 2010. "Another empirical look at the Kuznets curve," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 3(2), pages 7-19, December.
  4. Axel Dreher & Noel Gaston, 2008. "Has Globalization Increased Inequality?," Review of International Economics, Wiley Blackwell, vol. 16(3), pages 516-536, 08.
  5. Hugo Rojas-Romagosa & J.F. Francois, 2008. "Reassessing the relationship between inequality and development," CPB Discussion Paper 107, CPB Netherlands Bureau for Economic Policy Analysis.
  6. Carmen Fillat & Joseph Francois, 2004. "National and International Income Dispersion and Aggregate Expenditures," Tinbergen Institute Discussion Papers 04-093/2, Tinbergen Institute.
  7. Jean-Marie Viaene & Itzhak Zilcha, 2009. "Human Capital and Inequality Dynamics: The Role of Education Technology," Economica, London School of Economics and Political Science, vol. 76(304), pages 760-778, October.
  8. Raileanu Szeles, Monica, 2014. "A Multidimensional Approach to the Inclusiveness of economic Growth in the New Member States," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 5-24, June.
  9. 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.
  10. Jan Luiten van Zanden & Joerg Baten & Peter Foldvari & Bas van Leeuwen, 2011. "The Changing Shape of Global Inequality - exploring a new dataset," Working Papers 0001, Utrecht University, Centre for Global Economic History.
  11. Bas van Leeuwen & Peter Foldvari, 2012. "The development of inequality and poverty in Indonesia, 1932-1999," Working Papers 0026, Utrecht University, Centre for Global Economic History.

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