I have only marginal expertise here, but two comments:
1. The reference here is incomplete as you give no
author initials or journal or book details.
2. Clearly negative incomes make sense in your context;
trying to fix the Gini as if they didn't exist seems
to be a denial of this and dubious practice.
Nick
[email protected]
G�l �NAL
> I am working with a large dataset which includes agricultural
> households. Households have negative incomes ( since it is
> agricultural production, income can turn negative in some cases). So,
> my problem is that, when I use ineqdec0, to include negative and zero
> values of income, it gives me gini coefficients that is sometimes
> greater than 1 ( which I calculate for 500 villages) . This is normal,
> because as it is discussed in an article by Chen et al. (1982),
> titled: "The Gini coefficient and negative income" the definition of
> the Gini coefficient allows that to happen when there are negative
> incomes. Chen et al. also suggest a way to normalize it so that Gini
> coefficient would be between 0 and 1 only.
>
> Does anyone know a code or a command in Stata that would do this,
> i.e., normalize the Gini coefficient so that when negative incomes are
> in the data, Gini would not be larger than 1. Since I have been using
> ineqdec0 so far, I am not really familiar with the ado file of it, is
> the only way to go and change the do file based on Chen's suggestion
> to normalize it?
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