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Is the Size Distribution of Income in Canada a Random Walk?

Author

Listed:
  • Baotai Wang

    (University of Northern British Columbia)

  • Tomson Ogwang

    (Brock University)

Abstract

Several recent studies have investigated whether the size distribution of income in the United States follows a random walk meaning that it has a unit root, with mixed results. In this paper, we investigate the same issue using Canadian national and provincial income inequality data. The investigation is conducted using three different unit root tests. The results suggest modeling the Gini coefficients for Canada and for most provinces as an I(1) is quite reasonable.

Suggested Citation

  • Baotai Wang & Tomson Ogwang, 2004. "Is the Size Distribution of Income in Canada a Random Walk?," Economics Bulletin, AccessEcon, vol. 3(29), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-04c20016
    as

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    File URL: http://www.accessecon.com/pubs/EB/2004/Volume3/EB-04C20016A.pdf
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    References listed on IDEAS

    as
    1. Raj, Baldev & Slottje, Daniel J, 1994. "The Trend Behavior of Alternative Income Inequality Measures in the United States from 1947-1990 and the Structural Break," Journal of Business & Economic Statistics, American Statistical Association, vol. 12(4), pages 479-487, October.
    2. Hayes, Kathy & Slottje, D. J. & Porter-Hudak, Susan & Scully, Gerald, 1990. "Is the size distribution of income a random walk?," Journal of Econometrics, Elsevier, vol. 43(1-2), pages 213-226.
    3. Elliott, Graham & Rothenberg, Thomas J & Stock, James H, 1996. "Efficient Tests for an Autoregressive Unit Root," Econometrica, Econometric Society, vol. 64(4), pages 813-836, July.
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    Cited by:

    1. Chun‐Yu Ho & Dan Li, 2008. "Rising regional inequality in China: Policy regimes and structural changes," Papers in Regional Science, Wiley Blackwell, vol. 87(2), pages 245-259, June.

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    More about this item

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • D3 - Microeconomics - - Distribution

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