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Adjusting for age effects in cross-sectional distributions

Author

Listed:
  • Ingvild Almas

    () (Norwegian School of Economics and Business Administration)

  • Tarjei Havnes

    () (University of Oslo)

  • Magne Mogstad

    () (University College London)

Abstract

Income and wealth differ over the life cycle. In cross-sectional distributions of income or wealth, classical inequality measures such as the Gini could therefore find substantial inequality even if everyone has the same lifetime income or wealth. We describe the adjusted Gini index (Almas and Mogstad, 2012, Scandinavian Journal of Economics 114: 24–54), which is a generalization of the classical Gini index with attractive properties, and we describe the adgini command, which provides the adjusted Gini index and the classical Gini index. The adgini command also provides options to produce other well-known age-adjusted inequality measures, such as the Paglin-Gini (Paglin, 1975, American Economic Review 65: 598–609) and the Wertz-Gini (Wertz, 1979, American Economic Review 69: 670–672), and provides efficient estimation of the classical Gini coefficient. Copyright 2012 by StataCorp LP.

Suggested Citation

  • Ingvild Almas & Tarjei Havnes & Magne Mogstad, 2012. "Adjusting for age effects in cross-sectional distributions," Stata Journal, StataCorp LP, vol. 12(3), pages 393-405, September.
  • Handle: RePEc:tsj:stataj:v:12:y:2012:i:3:p:393-405
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    References listed on IDEAS

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    1. Bossert W., 1996. "Redistribution mechanisms based on individual characteristics," Mathematical Social Sciences, Elsevier, vol. 31(1), pages 51-51, February.
    2. Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-1227, September.
    3. Konow, James, 1996. "A positive theory of economic fairness," Journal of Economic Behavior & Organization, Elsevier, vol. 31(1), pages 13-35, October.
    4. Anthony Shorrocks & Guanghua Wan, 2005. "Spatial decomposition of inequality," Journal of Economic Geography, Oxford University Press, vol. 5(1), pages 59-81, January.
    5. Paglin, Morton, 1975. "The Measurement and Trend of Inequality: A Basic Revision," American Economic Review, American Economic Association, vol. 65(4), pages 598-609, September.
    6. Wertz, Kenneth L, 1979. "The Measurement of Inequality: Comment," American Economic Review, American Economic Association, vol. 69(4), pages 670-672, September.
    7. Atkinson, A B, 1971. "The Distribution of Wealth and the Individual Life-cycle," Oxford Economic Papers, Oxford University Press, vol. 23(2), pages 239-254, July.
    8. Nelson, Eric R, 1977. "The Measurement and Trend of Inequality: Comment," American Economic Review, American Economic Association, vol. 67(3), pages 497-501, June.
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    Cited by:

    1. Andrew Hussey & Michael Jetter, 2017. "Long term trends in fair and unfair inequality in the United States," Applied Economics, Taylor & Francis Journals, vol. 49(12), pages 1147-1163, March.
    2. Aristizábal-Ramírez, María & Canavire Bacarreza, Gustavo J & Jetter, Michael, 2015. "Income Inequality in Bolivia, Colombia, and Ecuador: Different Reasons," IZA Discussion Papers 9210, Institute of Labor Economics (IZA).
    3. Andrew J. Hussey & Michael Jetter & Dianne McWilliam, 2017. "Explaining Inequality Between Countries: The Declining Role of Political Institutions," CESifo Working Paper Series 6320, CESifo.

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