Measuring Inequality Using Censored Data: A Multiple Imputation Approach

35 Pages Posted: 8 Jul 2009  

Stephen P. Jenkins

London School of Economics & Political Science (LSE) - Department of Social Policy and Administration; Institute for the Study of Labor (IZA); University of Essex - Institute for Social and Economic Research (ISER)

Richard V. Burkhauser

Cornell University - Department of Policy Analysis & Management (PAM); University of Melbourne, Melbourne Institute

Shuaizhang Feng

Shanghai University of Finance and Economics - Department of Economics; Princeton University; IZA Institute of Labor Economics

Jeff Larrimore

Board of Governors of the Federal Reserve System

Multiple version iconThere are 2 versions of this paper

Date Written: March 2009

Abstract

To measure income inequality with right censored (topcoded) data, we propose multiple imputation for censored observations using draws from Generalized Beta of the Second Kind distributions to provide partially synthetic datasets analyzed using complete data methods. Estimation and inference uses Reiter's (Survey Methodology 2003) formulae. Using Current Population Survey (CPS) internal data, we find few statistically significant differences in income inequality for pairs of years between 1995 and 2004. We also show that using CPS public use data with cell mean imputations may lead to incorrect inferences about inequality differences. Multiply-imputed public use data provide an intermediate solution.

Keywords: income inequality, topcoding, partially synthetic data, CPS, current population survey, generalized beta of the second kind distribution

JEL Classification: D31, C46, C81

Suggested Citation

Jenkins, Stephen P. and Burkhauser, Richard V. and Feng, Shuaizhang and Larrimore, Jeff, Measuring Inequality Using Censored Data: A Multiple Imputation Approach (March 2009). DIW Berlin Discussion Paper No. 866; US Census Bureau Center for Economic Studies Paper No. CES-WP- 09-05. Available at SSRN: https://ssrn.com/abstract=1431352 or http://dx.doi.org/10.2139/ssrn.1431352

Stephen P. Jenkins (Contact Author)

London School of Economics & Political Science (LSE) - Department of Social Policy and Administration ( email )

Houghton Street
London, England WC2A 2AE
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 120 687 3374 (Phone)
+44 120 687 3151 (Fax)

Richard V. Burkhauser

Cornell University - Department of Policy Analysis & Management (PAM) ( email )

120 Martha Van Rensselaer Hall
Ithaca, NY 14853
United States

University of Melbourne, Melbourne Institute ( email )

Level 5, FBE Building, 111 Barry Street
161 Barry Street
Carlton, VIC 3053
Australia

Shuaizhang Feng

Shanghai University of Finance and Economics - Department of Economics ( email )

777 Guoding Road
Shanghai, Shanghai 200433
China

Princeton University

22 Chambers Street
Princeton, NJ 08544-0708
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Jeff Larrimore

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

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