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Measuring Income Mobility with Dirty Data (published in Ethnic and Racial Studies, 22(3), May 1999)

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  • Frank A Cowell
  • Christian Schluter

Abstract

We examine the performance of measures of mobility when allowance is made for the possibility of data contamination. We find that 'single-stage' indices - those that are applied directly to a sample from a multivariate income distribution - usually prove to be non-robust in the face of contamination. However, 'two-stage' models of mobility - where the distribution is first 'discretised' into income intervals and then a transition matrix or other tool is applied - may be robust if the first stage is appropriately specified.

Suggested Citation

  • Frank A Cowell & Christian Schluter, 1998. "Measuring Income Mobility with Dirty Data (published in Ethnic and Racial Studies, 22(3), May 1999)," CASE Papers case16, Centre for Analysis of Social Exclusion, LSE.
  • Handle: RePEc:cep:sticas:case16
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    File URL: http://sticerd.lse.ac.uk/dps/case/cp/paper16.pdf
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    References listed on IDEAS

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    1. King, Mervyn A, 1983. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," Econometrica, Econometric Society, vol. 51(1), pages 99-115, January.
    2. Maasoumi, Esfandiar & Zandvakili, Sourushe, 1990. "Generalized entropy measures of mobility for different sexes and income levels," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 121-133.
    3. John Bound & Charles Brown & Greg J. Duncan & Willard L. Rodgers, 1989. "Measurement Error In Cross-Sectional and Longitudinal Labor Market Surveys: Results From Two Validation Studies," NBER Working Papers 2884, National Bureau of Economic Research, Inc.
    4. Frank A. Cowell, 1985. "Measures of Distributional Change: An Axiomatic Approach," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 135-151.
    5. Bound, John & Krueger, Alan B, 1991. "The Extent of Measurement Error in Longitudinal Earnings Data: Do Two Wrongs Make a Right?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 1-24, January.
    6. Fields, Gary S. & Ok, Efe A., 1997. "A Subgroup Decomposable Measure of Relative Income Mobility," Working Papers 97-04, C.V. Starr Center for Applied Economics, New York University.
    7. Maasoumi, Esfandiar & Zandvakili, Sourushe, 1986. "A class of generalized measures of mobility with applications," Economics Letters, Elsevier, vol. 22(1), pages 97-102.
    8. Geweke, John & Marshall, Robert C & Zarkin, Gary A, 1986. "Mobility Indices in Continuous Time Markov Chains," Econometrica, Econometric Society, vol. 54(6), pages 1407-1423, November.
    9. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    10. Mervyn A. King, 1980. "An Index of Inequality: With Applications to Horizontal Equity and Social Mobility," NBER Working Papers 0468, National Bureau of Economic Research, Inc.
    11. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
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