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Income Nonresponse and Inequality Measurement

Author

Listed:
  • Guillermo Paraje

    (School of Management, Universidad Adolfo Ibáñez)

  • Melvyn Weeks

    (Faculty of Economics and Politics, University of Cambridge)

Abstract

This paper analyses the effects that income nonresponse has on certain well-known inequality coefficients (e.g. Gini, Theil and Atkinson indexes). A number of statistical methods have been developed to impute missing values of incomes for nonrespondents. By simulating several patterns of income nonresponse on actual sub-samples of the Argentinean household survey, this essay analyses the effects that different correction methods produce on a set of inequality coefficients. It is proved that methods often used to correct for nonresponse can introduce important biases on inequality coefficients if the patterns of missingness assumed by such methods do not coincide with the actual pattern.

Suggested Citation

  • Guillermo Paraje & Melvyn Weeks, 2010. "Income Nonresponse and Inequality Measurement," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 25(2), pages 193-221, Diciembre.
    • Handle: RePEc:ila:anaeco:v:25:y:2010:i:2:p:193-221
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    Keywords

    Household surveys; income imputation; inequality measures. Jel classification: C15; C81; D31.;
    All these keywords.

    JEL classification:

    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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