The Bias of the Gini Coefficient due to Grouping

Tom Van Ourti and Philip Clarke ()
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Philip Clarke: University of Sydney, Australia

No 08-095/3, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: Read also the publication in the 'Review of Economics and Statistics' , 2010, 93(3), 982-994.

We propose a first order bias correction term for the Gini index to reduce the bias due to grouping. The first order correction term is obtained from studying the estimator of the Gini index within a measurement error framework. In addition, it reveals an intuitive formula for the remaining second order bias which is useful in empirical analyses. We analyze the empirical performance of our first order correction term using income data for 15 European countries and the US, and show that it reduces a considerable share of the bias due to grouping.

Keywords: Gini index; grouped data; measurement error; first-order correction (search for similar items in EconPapers)
JEL-codes: C19 D31 I30 (search for similar items in EconPapers)
Date: 2008-10-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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