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Re: st: Covariance matrice.


From   Stas Kolenikov <skolenik@email.unc.edu>
To   statalist@hsphsun2.harvard.edu
Subject   Re: st: Covariance matrice.
Date   Wed, 25 Aug 2004 16:50:05 -0400 (EDT)

> I have an income variable grouped into 5 categories (Q1 Q2 Q3 Q4 Q5) ie
> from poorest to richest and I want to compute its covariance with the
> following vector:
>
>         |   0.1    |
>         |   0.3    |
>         |   0.5    |
> X =  |   0.7    |
>         |  0.9     |
>
> How to do that into stata?
> I would appreciate any help.

It looks like you are trying to estimate the Gini coefficient. This would
be a quite risky thing to do with the quintile data, I would argue. Kit
Baum posted a solution, but you should keep in mind when you want to
interpret this data that computing such covariance understates the Gini
coefficient quite notably: just draw the Lorenz curve for the data with
five levels of income corresponding to the discrete distribution you are
dealing with.

 ---                                    Stas Kolenikov
 --       Ph.D. student in Statistics at UNC-Chapel Hill
 - http://www.komkon.org/~tacik/  -- Stas.Kolenikov@unc.edu

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