Truncation Bias and the Ordinal Evaluation of Income Inequality

John A Bishop, Jong-Rong Chiou and John P Formby

Journal of Business & Economic Statistics, 1994, vol. 12, issue 1, 123-27

Abstract: Lorenz dominance analysis is used to examine the effect of top-coding on the ordinal evaluation of U.S. income inequality across time. Current Population Survey microdata are adjusted for truncation bias, and statistical inference procedures are used to examine biennial changes in unadjusted and adjusted Lorenz curves. Beginning in 1985, the truncation bias has a significant effect on ordinal rankings of income inequality.

Date: 1994
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Persistent link: https://EconPapers.repec.org/RePEc:bes:jnlbes:v:12:y:1994:i:1:p:123-27

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