Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/247239 
Year of Publication: 
2020
Series/Report no.: 
LIS Working Paper Series No. 804
Publisher: 
Luxembourg Income Study (LIS), Luxembourg
Abstract: 
Grouped data in the form of income shares have conventionally been used to estimate income inequality due to the lack of individual records. We provide guidance on the choice between parametric and nonparametric methods and its estimation, for which we develop the GB2group R package. We present a systematic evaluation of the performance of parametric distributions to estimate economic inequality. The accuracy of these estimates is compared with those obtained by nonparametric techniques in more than 5000 datasets. Our results indicate that even the simplest parametric models provide reliable estimates of inequality measures. The nonparametric approach, however, fails to represent income distributions accurately.
JEL: 
D31
C13
C18
Document Type: 
Working Paper

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