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A note on the use of decile or quintile group-share of income or consumption from the popular income inequality databases to explain inequality conditions

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  • Amlan Majumder

    (University of North Bengal, Darjeeling)

  • Takayoshi Kusago

    (Kansai University, Osaka)

Abstract

As Gini coefficient does not summarise all that an income distribution can tell us about inequality, there has been an increasing thrust in literature on supplementing or even replacing the use of it by direct examination of the income distributions. However, the problem that remains with the common readers is that they are to rely on popular databases of inequality for Gini coefficient based on microdata; and on income distributions, which are squeezed into deciles or quintiles. The basic question is that whether such grouped data are consistent enough to do the practices as stated above. Any doubtful use of those may be very misleading. In such a situation, we perform some consistency checks of inequality data available in various World Development Indicators and World Income Inequality Database - WIID 3.4 for illustrative purpose only in interest of the common readers. In this connection, we discuss about the issues like shortfall, underestimation, bias etc. As observed from the preliminary results, nearly 7.5 % and 13 % cases appear to be unusual in quintile and decile data respectively in WIID 3.4. Some of these are simply misreporting or typos, which are to be corrected, and some appear to be very special (with positive bias instead of downward bias), which warrant theoretical attention for further research. Common readers may restrain themselves from using the unusual cases in study to explain inequality conditions.

Suggested Citation

  • Amlan Majumder & Takayoshi Kusago, 2018. "A note on the use of decile or quintile group-share of income or consumption from the popular income inequality databases to explain inequality conditions," Economics Bulletin, AccessEcon, vol. 38(4), pages 2152-2166.
  • Handle: RePEc:ebl:ecbull:eb-18-00718
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    References listed on IDEAS

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    1. Tom Van Ourti & Philip Clarke, 2011. "A Simple Correction to Remove the Bias of the Gini Coefficient due to Grouping," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 982-994, August.
    2. Lars Osberg, 2017. "On the Limitations of Some Current Usages of the Gini Index," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(3), pages 574-584, September.
    3. Branko Milanovic, 2012. "Global inequality recalculated and updated: the effect of new PPP estimates on global inequality and 2005 estimates," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(1), pages 1-18, March.
    4. Lerman, Robert I. & Yitzhaki, Shlomo, 1989. "Improving the accuracy of estimates of Gini coefficients," Journal of Econometrics, Elsevier, vol. 42(1), pages 43-47, September.
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    Cited by:

    1. Amlan Majumder & Takayoshi Kusago, 2021. "A consistency check of the World Income Inequality Database in favour of common readers," SN Business & Economics, Springer, vol. 1(7), pages 1-17, July.

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    More about this item

    Keywords

    Consistency check of inequality data; grouping of microdata; squeezed income distributions; underestimation of Gini coefficient; World Income Inequality Database;
    All these keywords.

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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