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Amlan Majumder and Takayoshi Kusago
''A note on the use of decile or quintile group-share of income or consumption from the popular income inequality databases to explain inequality conditions''
( 2018, Vol. 38 No.4 )
As Gini coefficient does not summarise all that an income distribution can tell us about inequality, there has been an increasing thrust in literature on supplementing or even replacing the use of it by direct examination of the income distributions. However, the problem that remains with the common readers is that they are to rely on popular databases of inequality for Gini coefficient based on microdata; and on income distributions, which are squeezed into deciles or quintiles. The basic question is that whether such grouped data are consistent enough to do the practices as stated above. Any doubtful use of those may be very misleading. In such a situation, we perform some consistency checks of inequality data available in various World Development Indicators and World Income Inequality Database - WIID 3.4 for illustrative purpose only in interest of the common readers. In this connection, we discuss about the issues like shortfall, underestimation, bias etc. As observed from the preliminary results, nearly 7.5 % and 13 % cases appear to be unusual in quintile and decile data respectively in WIID 3.4. Some of these are simply misreporting or typos, which are to be corrected, and some appear to be very special (with positive bias instead of downward bias), which warrant theoretical attention for further research. Common readers may restrain themselves from using the unusual cases in study to explain inequality conditions.
Keywords: Consistency check of inequality data, grouping of microdata, squeezed income distributions, underestimation of Gini coefficient, World Income Inequality Database
JEL: D3 - Distribution: General
I3 - Welfare and Poverty: General
Manuscript Received : Sep 05 2018 Manuscript Accepted : Dec 02 2018

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