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Measuring Inequality Using Censored Data: A Multiple Imputation Approach

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  • Stephen Jenkins
  • Richard Burkhauser
  • Shuaizhang Feng
  • Jeff Larrimore

Abstract

To measure income inequality with right censored (topcoded) data, we propose multiple imputation for censored observations using draws from Generalized Beta of the Second Kind distributions to provide partially synthetic datasets analyzed using complete data methods. Estimation and inference uses Reiter’s (Survey Methodology 2003) formulae. Using Current Population Survey (CPS) internal data, we find few statistically significant differences in income inequality for pairs of years between 1995 and 2004. We also show that using CPS public use data with cell mean imputations may lead to incorrect inferences about inequality differences. Multiply-imputed public use data provide an intermediate solution.

Suggested Citation

  • Stephen Jenkins & Richard Burkhauser & Shuaizhang Feng & Jeff Larrimore, 2009. "Measuring Inequality Using Censored Data: A Multiple Imputation Approach," Working Papers 09-05, Center for Economic Studies, U.S. Census Bureau.
  • Handle: RePEc:cen:wpaper:09-05
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    References listed on IDEAS

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    1. Richard Burkhauser & Shuaizhang Feng & Stephen Jenkins & Jeff Larrimore, 2011. "Estimating trends in US income inequality using the Current Population Survey: the importance of controlling for censoring," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(3), pages 393-415, September.
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    7. Richard V. Burkhauser & Shuaizhang Feng & Jeff Larrimore, 2008. "Measuring Labor Earnings Inequality using Public-Use March Current Population Survey Data: The Value of Including Variances and Cell Means When Imputing Topcoded Values," NBER Working Papers 14458, National Bureau of Economic Research, Inc.
    8. Gartner, Hermann & Rässler, Susanne, 2005. "Analyzing the changing gender wage gap based on multiply imputed right censored wages," IAB Discussion Paper 200505, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Stephen P. Jenkins, 2006. "SVYLORENZ: Stata module to derive distribution-free variance estimates from complex survey data, of quantile group shares of a total, cumulative quantile group shares," Statistical Software Components S456602, Boston College Department of Economics, revised 15 Sep 2015.
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    19. Feng, Shuaizhang & Burkhauser, Richard V. & Butler, J.S., 2006. "Levels and Long-Term Trends in Earnings Inequality: Overcoming Current Population Survey Censoring Problems Using the GB2 Distribution," Journal of Business & Economic Statistics, American Statistical Association, vol. 24, pages 57-62, January.
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    Cited by:

    1. Richard Burkhauser & Shuaizhang Feng & Stephen Jenkins & Jeff Larrimore, 2009. "Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data," Working Papers 09-26, Center for Economic Studies, U.S. Census Bureau.
    2. Richard Burkhauser & Shuaizhang Feng & Stephen Jenkins & Jeff Larrimore, 2011. "Estimating trends in US income inequality using the Current Population Survey: the importance of controlling for censoring," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(3), pages 393-415, September.
    3. Doerrenberg, Philipp & Duncan, Denvil & Fuest, Clemens & Peichl, Andreas, 2012. "Nice Guys Finish Last: Are People with Higher Tax Morale Taxed More Heavily?," IZA Discussion Papers 6275, Institute of Labor Economics (IZA).
    4. Nora Lustig, 2016. "Commitment to Equity Handbook. A Guide to Estimating the Impact of Fiscal Policy on Inequality and Poverty," Commitment to Equity (CEQ) Working Paper Series 1301, Tulane University, Department of Economics.
    5. Jonathan D. Fisher & David S. Johnson & Timothy M. Smeeding, 2013. "Measuring the Trends in Inequality of Individuals and Families: Income and Consumption," American Economic Review, American Economic Association, vol. 103(3), pages 184-188, May.
    6. Ivan Kitov & Oleg Kitov, 2015. "Gender income disparity in the USA: analysis and dynamic modelling," Papers 1510.02752, arXiv.org.
    7. SOLOGON Denisa & VAN KERM Philippe, 2014. "Earnings dynamics, foreign workers and the stability of inequality trends in Luxembourg 1988-2009," LISER Working Paper Series 2014-03, LISER.

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    More about this item

    Keywords

    Income Inequality; Topcoding; Partially Synthetic Data; CPS; Current Population Survey; Generalized Beta of the Second Kind distribution;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access

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