On the suitability of income inequality measures for regional analysis: Some evidence from simulation analysis and bootstrapping tests

Boris A. Portnov*, Daniel Felsenstein

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

21 Scopus citations

Abstract

The paper looks at the sensitivity of commonly used income inequality measures to changes in the ranking, size and number of regions into which a country is divided. During the analysis, several test distributions of populations and incomes are compared with a 'reference' distribution, characterized by an even distribution of population across regional subdivisions. Random permutation tests are also run to determine whether inequality measures commonly used in regional analysis produce meaningful estimates when applied to regions of different population size. The results show that only the population weighted coefficient of variation (Williamson's index) and population-weighted Gini coefficient may be considered sufficiently reliable inequality measures, when applied to countries with a small number of regions and with varying population sizes.

Original languageAmerican English
Pages (from-to)212-219
Number of pages8
JournalSocio-Economic Planning Sciences
Volume44
Issue number4
DOIs
StatePublished - Dec 2010

Keywords

  • Bootstrapping
  • Inequality measures
  • Random permutation tests
  • Regions

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