Welfare measurement and measurement error
Welfare measurement and measurement error
The approximate effects of measurement error on a variety of measures of inequality and poverty are derived. They are shown to depend on the measurement error variance and functionals of the error–contaminated income distribution, but not on the form of the measurement error distribution, and to be accurate within a rich class of error–free income distributions and measurement error distributions. The functionals of the error–contaminated income distribution that approximate the measurement error induced distortions can be estimated. So it is possible to investigate the sensitivity of welfare measures to alternative amounts of measurement error and, when an estimate of the measurement error variance is available, to calculate corrected welfare measures. The methods are illustrated in an application using Indonesian household expenditure data.
357-378
Chesher, Andrew
e93494ff-bec8-48d3-83b5-de5352d89faf
Schluter, Christian
ae043254-4cc4-48aa-abad-56a36554de2b
April 2002
Chesher, Andrew
e93494ff-bec8-48d3-83b5-de5352d89faf
Schluter, Christian
ae043254-4cc4-48aa-abad-56a36554de2b
Chesher, Andrew and Schluter, Christian
(2002)
Welfare measurement and measurement error.
Review of Economic Studies, 69 (2), .
(doi:10.1111/1467-937X.00209).
Abstract
The approximate effects of measurement error on a variety of measures of inequality and poverty are derived. They are shown to depend on the measurement error variance and functionals of the error–contaminated income distribution, but not on the form of the measurement error distribution, and to be accurate within a rich class of error–free income distributions and measurement error distributions. The functionals of the error–contaminated income distribution that approximate the measurement error induced distortions can be estimated. So it is possible to investigate the sensitivity of welfare measures to alternative amounts of measurement error and, when an estimate of the measurement error variance is available, to calculate corrected welfare measures. The methods are illustrated in an application using Indonesian household expenditure data.
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Published date: April 2002
Organisations:
Economics
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Local EPrints ID: 33354
URI: http://eprints.soton.ac.uk/id/eprint/33354
ISSN: 0034-6527
PURE UUID: 919f9d7e-a4bc-4118-b971-e8e687fb5527
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Date deposited: 15 May 2006
Last modified: 15 Mar 2024 07:43
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Author:
Andrew Chesher
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