The Bias of the Gini Coefficient Due to Grouping: Revisiting First-Order Corrections

Tinbergen Institute Discussion Paper No. 08-095/3

49 Pages Posted: 13 Oct 2008

See all articles by Tom Van Ourti

Tom Van Ourti

Erasmus University Rotterdam (EUR); Tinbergen Institute

Philip Clarke

University of Sydney - School of Public Health

Date Written: October 9, 2008

Abstract

We propose a first order bias correction term for the Gini index to reduce the bias due to grouping. The first order correction term is obtained from studying the estimator of the Gini index within a measurement error framework. In addition, it reveals an intuitive formula for the remaining second order bias which is useful in empirical analyses. We analyze the empirical performance of our first order correction term using income data for 15 European countries and the US, and show that it reduces a considerable share of the bias due to grouping.

Keywords: Gini index, grouped data, measurement error, first-order correction

JEL Classification: C19, D31, I30

Suggested Citation

Van Ourti, Tom and Clarke, Philip, The Bias of the Gini Coefficient Due to Grouping: Revisiting First-Order Corrections (October 9, 2008). Tinbergen Institute Discussion Paper No. 08-095/3, Available at SSRN: https://ssrn.com/abstract=1283562 or http://dx.doi.org/10.2139/ssrn.1283562

Tom Van Ourti (Contact Author)

Erasmus University Rotterdam (EUR) ( email )

Burgemeester Oudlaan 50
3000 DR Rotterdam, Zuid-Holland 3062PA
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Philip Clarke

University of Sydney - School of Public Health ( email )

University of Sydney
Sydney NSW 2006
Australia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
98
Abstract Views
1,405
rank
311,369
PlumX Metrics