A simple correction to remove the bias of the gini coefficient due to grouping

Tom Van Ourti*, Philip Clarke

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

16 Citations (Scopus)

Abstract

Abstract-We propose a first-order bias correction term for the Gini index to reduce the bias due to grouping. It depends on only the number of individuals in each group and is derived from a measurement error framework. We also provide a formula for the remaining second-order bias. Both Monte Carlo and EU and U.S. empirical evidence show that the first-order correction reduces a considerable share of the bias, but that some remaining second-order bias is increasing in the variance. We propose a procedure that addresses the remaining second-order bias by using additional information.

Original languageEnglish
Pages (from-to)982-994
Number of pages13
JournalReview of Economics and Statistics
Volume93
Issue number3
DOIs
Publication statusPublished - Aug 2011
Externally publishedYes

Fingerprint

Dive into the research topics of 'A simple correction to remove the bias of the gini coefficient due to grouping'. Together they form a unique fingerprint.

Cite this