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Using the P90/P10 index to measure U.S. inequality trends with current population survey data: a view from inside the census bureau vaults

Burkhauser, Richard V., Feng, Shuaizhang and Jenkins, Stephen P. (2009) Using the P90/P10 index to measure U.S. inequality trends with current population survey data: a view from inside the census bureau vaults. Review of Income and Wealth, 55 (1). pp. 166-185. ISSN 0034-6586

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Abstract

The March Current Population Survey (CPS) is the primary data source for estimation of levels and trends in U.S. earnings and income inequality. However, time-inconsistency problems related to top coding lead many CPS users to measure inequality via the ratio of the 90th to the 10th percentile (P90/P10) rather than by more traditional summary measures. With access to public use and restricted-access internal CPS data, and by applying bounding methods, we show that using P90/P10 does not completely obviate time-inconsistency problems, especially in capturing household income inequality trends. Using internal data, we create consistent cell mean values for all top-coded public use values that, when used with public use data, closely track inequality trends in earnings and household income using internal data. But estimates of longer-term inequality trends with these corrected data based on P90/P10 differ from those based on the Gini coefficient. The choice of inequality measure still matters.

Item Type: Article
Official URL: http://www.wiley.com/bw/journal.asp?ref=0034-6586
Additional Information: © 2009 The Authors
Library of Congress subject classification: H Social Sciences > HA Statistics
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Sets: Departments > Social Policy
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 02 Feb 2011 16:17
URL: http://eprints.lse.ac.uk/32041/

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