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Inequality and the accounting period

Author

Listed:
  • Quentin Wodon

    () (World Bank)

  • Shlomo Yitzhaki

    () (Hebrew University)

Abstract

Income inequality typically declines with the length of time taken into account for measurement. This note derives an exact analytical relationship between the accounting period and inequality as measured by the Gini index. The formal relationship is similar to the decomposition of the coefficient of variation. The methodology is illustrated with panel data on urban wages from Mexico. It is found that the effect of the accounting period on inequality is sensitive to the properties of the Gini correlations between the periodical incomes. Reporting this type of correlation enables the evaluation of the impact of the length of the accounting period on inequality.

Suggested Citation

  • Quentin Wodon & Shlomo Yitzhaki, 2003. "Inequality and the accounting period," Economics Bulletin, AccessEcon, vol. 4(36), pages 1-8.
  • Handle: RePEc:ebl:ecbull:eb-03d30005
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    File URL: http://www.accessecon.com/pubs/EB/2003/Volume4/EB-03D30005A.pdf
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    References listed on IDEAS

    as
    1. Richard V. Burkhauser & John G. Poupore, 1997. "A Cross-National Comparison Of Permanent Inequality In The United States And Germany," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 10-17, February.
    2. Creedy, John, 1979. "The Inequality of Earnings and the Accounting Period," Scottish Journal of Political Economy, Scottish Economic Society, vol. 26(1), pages 89-96, February.
    3. Gibson, John & Huang, Jikun & Rozelle, Scott, 2001. "Why is income inequality so low in China compared to other countries?: The effect of household survey methods," Economics Letters, Elsevier, vol. 71(3), pages 329-333, June.
    4. Schechtman, E. & Yitzhaki, S., 1999. "On the proper bounds of the Gini correlation," Economics Letters, Elsevier, vol. 63(2), pages 133-138, May.
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    Citations

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    Cited by:

    1. Schröder, Carsten, 2012. "The sensitivity of distributional measures to the reference period of income," Kiel Working Papers 1777, Kiel Institute for the World Economy (IfW).
    2. Charlotte Bartels, 2012. "Redistribution and Insurance in the German Welfare State," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 132(2), pages 265-295.
    3. Carsten Schröder & Yolanda Golan & Shlomo Yitzhaki, 2014. "Inequality and the time structure of earnings: evidence from Germany," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, pages 393-409.
    4. Allanson, Paul & Gerdtham, Ulf-G. & Petrie, Dennis, 2010. "Longitudinal analysis of income-related health inequality," Journal of Health Economics, Elsevier, pages 78-86.
    5. Yoel Finkel & Yevgeny Artsev & Shlomo Yitzhaki, 2006. "Inequality measurement and the time structure of household income in Israel," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, pages 153-179.
    6. Vincenzo Atella & Jay Coggins & Federico Perali, 2005. "Aversion to inequality in Italy and its determinants," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, pages 117-144.

    More about this item

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • I0 - Health, Education, and Welfare - - General

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