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Activity Number: 647
Type: Contributed
Date/Time: Thursday, August 7, 2014 : 10:30 AM to 12:20 PM
Sponsor: Business and Economic Statistics Section
Abstract #312930 View Presentation
Title: Reanalysis of Income Inequality in the United States from 1967--2012 with a Semi-Robust Version Gini-Type Index Indicates a Greater Rate of Increase in Inequality During the Period
Author(s): Joseph Gastwirth*+
Companies: George Washington University
Keywords: economic inequalty ; Gini index ; robust measure of inequality ; increasing trend in inequality
Abstract:

The increase in income inequality in the United States during the years from 1967 to 2012 has gotten the attention of the nation's policy makers. It will be seen that the standard Gini index, G, is likely to underestimate the rate of increase in inequality because a shift of income towards the top incomes increases both the numerator and denominator of G. A modified index (G2), which replaces the mean in the denominator by the median, a robust estimator of centrality, indicates that income inequality in the United States grew at about twice the rate as the Gini index from 1967 to 2012. The analysis accounts for the effect of the changes made in the survey collection process in 1994. The index G2 is readily computed from the mean, median and Gini index, routinely published by the U.S. Census Bureau and other national statistical agencies. Thus, it is an easily calculated summary descriptive measure of income inequality in the total population and is more sensitive to important changes in the income distribution than the Gini index


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