A new computational approach for estimation of the Gini index based on grouped data

Tatjana Miljkovic () and Ying-Ju Chen
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Tatjana Miljkovic: Miami University
Ying-Ju Chen: University of Dayton

Computational Statistics, 2021, vol. 36, issue 3, No 33, 2289-2311

Abstract: Abstract Many government agencies still rely on the grouped data as the main source of information for calculation of the Gini index. Previous research showed that the Gini index based on the grouped data suffers the first and second-order correction bias compared to the Gini index computed based on the individual data. Since the accuracy of the estimated correction bias is subject to many underlying assumptions, we propose a new method and name it D-Gini, which reduces the bias in Gini coefficient based on grouped data. We investigate the performance of the D-Gini method on an open-ended tail interval of the income distribution. The results of our simulation study showed that our method is very effective in minimizing the first and second order-bias in the Gini index and outperforms other methods previously used for the bias-correction of the Gini index based on grouped data. Three data sets are used to illustrate the application of this method.

Keywords: D-Gini index; Bias correction; Income inequality (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s00180-021-01082-7

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