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  • Can i calculate the GINI-Coefficient with household adjusted wealth index scores?

    Dear Statalist,
    This is the first time that I need to calculate GINI coefficient to analyze inequality situation in my country. To avoid the problem of measurement error with income and expenditure data, I designed to use an asset ownership data by calculating "Wealth Index score".
    By definition,the mean of the wealth index scores is zero and some of them are negative . so i rescaled them to the 0-100 range. (I got this ideal from Jeroen Smits and Roel Steendijk, 2013)
    and I hope I can calculate the GINI-Coefficient by using this score.

    Am i missing some concept?
    Is it wrong to do something like that?

    Thank you
    Wuttipong Tunyut

    p.s. I have to apologize if I show you some of my bad English and Statistics skill.
    Last edited by Wuttipong Tunyut; 08 Apr 2015, 02:42.

  • #2
    An asset-based wealth index can be used to establish a relative ranking of households but it contains limited information on absolute wealth or poverty. For example, you cannot really say how much the richest 20% of households own compared to the poorest 20%. Nevertheless, it would be informative if you could compare your results with those by researchers who calculated a Gini coefficient for your country from other data. Have you done that?

    Please provide full literature references, as explained in the FAQ.

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