Sensitivity of Inequality Measures to Extreme Values

23 Pages Posted: 21 Feb 2008

See all articles by Frank Cowell

Frank Cowell

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)

Emmanuel Flachaire

Aix-Marseille University

Date Written: March 2002

Abstract

We examine the sensitivity of estimates and inequality indices to extreme values, in the sense of their robustness properties and of their statistical performance. We establish that these measures are very sensitive to the properties of the income distribution. Estimation and inference can be dramatically affected, especially when the tail of the income distribution is heavy.

Suggested Citation

Cowell, Frank A. and Flachaire, Emmanuel, Sensitivity of Inequality Measures to Extreme Values (March 2002). LSE STICERD Research Paper No. 60. Available at SSRN: https://ssrn.com/abstract=1094842

Frank A. Cowell (Contact Author)

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 (0)171-955 7277 (Phone)
+44 (0)171-242 2357 (Fax)

Emmanuel Flachaire

Aix-Marseille University ( email )

3 Avenue Robert Schuman,
France

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