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Adjusting for age effects in cross-sectional distributions

Author

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  • 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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    4. 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).

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