2005/03/01 by James K. Galbraith, Hyunsub Kum · 2 citations
Social Sciences · Economics, Econometrics and Finance · #Income, Poverty, and Inequality #Economic Theory and Policy #Economic theories and models
paper · doi:10.1111/j.1475-4991.2005.00147.x
The deficiencies of the Deininger and Squire data set on household income inequality are well known to include sparse coverage, problematic measurements, and the combination of diverse data types into a single data set. Yet many studies have relied on this data due to the lack of available alternatives. In this paper we show how the UTIP-UNIDO measures of manufacturing pay inequality can be used, with other information, to estimate measures of household income inequality. We take advantage of the systematic relationship between the UTIP-UNIDO estimates and those of Deininger and Squire. The residuals from this exercise provide a map to problematic observations in the Deininger and Squire data, and the estimated coefficients provide a way to construct a new panel data set of estimated household income inequality. This new data set provides comparable and consistent measurements across space and through time.