# Re: st: Covariance matrice.

 From [email protected] To [email protected] Subject Re: st: Covariance matrice. Date Wed, 25 Aug 2004 17:06:01 -0400

```You're right, Stas.
I will post later a more detailed example of what I have in mind.
Have a meeting right now.
Best regards.

Stas Kolenikov
<[email protected]>         To:       [email protected]
Sent by:                         cc:
owner-statalist@hsphsun2.        Subject:  Re: st: Covariance matrice.
harvard.edu

08/25/2004 04:50 PM
statalist

> 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/  -- [email protected]

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