More Reliable Inference for Segregation Indices

Rebecca Allen (), Simon Burgess () and Frank Windmeijer

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: The most widely used measure of segregation is the dissimilarity index, D. It is now well understood that this measure also reflects randomness in the allocation of individuals to units; that is, it measures deviations from evenness not deviations from randomness. This leads to potentially large values of the segregation index when unit sizes and/or minority proportions are small, even if there is no underlying systematic segregation. Our response to this is to produce an adjustment to the index, based on an underlying statistical model. We specify the assignment problem in a very general way, with differences in conditional assignment probabilities underlying the resulting segregation. From this we derive a likelihood ratio test for the presence of any systematic segregation and a bootstrap bias adjustment to the dissimilarity index. We further develop the asymptotic distribution theory for testing hypotheses concerning the magnitude of the segregation index and show that use of bootstrap methods can improve the size and power properties of test procedures considerably. We illustrate these methods by comparing dissimilarity indices across school districts in England to measure social segregation.

Keywords: segregation; dissimilarity index; bootstrap methods; hypothesis testing (search for similar items in EconPapers)
JEL-codes: C12 C13 C15 C46 I21 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2009-04
New Economics Papers: this item is included in nep-ecm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:bri:cmpowp:09/216

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