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st: RE: Getting Started with ineqdeco |

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Fri, 13 Jul 2012 13:33:51 +0100 |

The Pedant did of course mean to say that there 9 deciles (not 99); there are 99 percentiles. More constructively, on the substantive question of "what to do given the data to hand?": The median of the poorest fifth is the 10th percentile (p10) and the median of the richest fifth is the 90th percentile (p90). The ratio p90/p10 is commonly used, at least by many labo(u)r economists, to summarise inequality. So you could calculate that measure for each community, and plug that rather than Gini coefficients into whatever subsequent analysis you are doing. Stephen ------------------ Professor Stephen P. Jenkins <[email protected]> Department of Social Policy and STICERD London School of Economics and Political Science Houghton Street, London WC2A 2AE, UK Tel: +44(0)20 7955 6527 Changing Fortunes: Income Mobility and Poverty Dynamics in Britain, OUP 2011, http://ukcatalogue.oup.com/product/9780199226436.do Survival Analysis Using Stata: http://www.iser.essex.ac.uk/survival-analysis Downloadable papers and software: http://ideas.repec.org/e/pje7.html -----Original Message----- From: Jenkins,S Sent: 13 July 2012 09:53 To: '[email protected]' Subject: st: Getting Started with ineqdeco ------------------------------ Date: Thu, 12 Jul 2012 17:06:36 +0000 (UTC) From: [email protected] Subject: st: Getting Started with ineqdeco Hi, I'm a newbie and statistics is not my long suit to say the least. I have approximately 250 communities and I want to give each one a gini coefficient that indicates the degree of income inequality prevailing there. For each community I have median income for each quintile. It appears that I have to use ineqdeco, which I have installed on my computer. After looking at the material on line, I'm not even sure where to start. I'm guessing that I have to create a single variable for each community that includes this data, but I'm not sure. Can anybody provide a "ineqdeco for dummies" description of exactly what I need to do? Marty ======================== For each community, you have "grouped" data, not unit-record data (observations on each and every unit within a community), and appear to have the median for each quintile group*, not the mean. Grouped data should not be used with -ineqdeco- (or other inequality measure programs on SSC) because they all assume that you have unit-record data. Put differently, if you do apply them to grouped data, as is, you will end up under-estimating inequality -- because you are in effect assuming equality within each quintile group. There are methods for estimating inequality indices from grouped data. A good reference is FA Cowell and F Mehta, (1982). "The estimation and interpolation of inequality measures", Review of Economic Studies, 49(2), 273-290, and references therein. See also FA Cowell's book, Measuring Inequality (several editions). Note that these methods typically assume that you have the _mean_ income within each group, not the _median_. In sum, I think your issues are not to do with -ineqdeco- or related programs. Rather, the fundamental issues concern the (lack of) information in the data at your disposal. You as researcher have to decide how to address those. One crude way might be to assume that the median within each quintile group is the same as the group mean, and apply one of the grouped data methods. Whatever, with only 5 pieces of information per community, summarising inequality accurately within each community is a difficult task Stephen * [Pedant's corner] The term "quintile" refers to an income value; there are 4 quintiles, not 5 (and 99 deciles, not 100, etc.). Talk about "quintile groups", not "quintiles", or -- more simply -- refer to the "poorest fifth", ..., "richest fifth". ------------------ Professor Stephen P. Jenkins <[email protected]> Department of Social Policy and STICERD London School of Economics and Political Science Houghton Street, London WC2A 2AE, UK Tel: +44(0)20 7955 6527 Changing Fortunes: Income Mobility and Poverty Dynamics in Britain, OUP 2011, http://ukcatalogue.oup.com/product/9780199226436.do Survival Analysis Using Stata: http://www.iser.essex.ac.uk/survival-analysis Downloadable papers and software: http://ideas.repec.org/e/pje7.html Please access the attached hyperlink for an important electronic communications disclaimer: http://lse.ac.uk/emailDisclaimer * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: RE: Getting Started with ineqdeco***From:*Austin Nichols <[email protected]>

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