Dear all,
I am working with a large dataset which includes agricultural
households. Households have negative incomes ( since it is
agricultural production, income can turn negative in some cases). So,
my problem is that, when I use ineqdec0, to include negative and zero
values of income, it gives me gini coefficients that is sometimes
greater than 1 ( which I calculate for 500 villages) . This is normal,
because as it is discussed in an article by Chen et al. (1982),
titled: "The Gini coefficient and negative income" the definition of
the Gini coefficient allows that to happen when there are negative
incomes. Chen et al. also suggest a way to normalize it so that Gini
coefficient would be between 0 and 1 only.
Does anyone know a code or a command in Stata that would do this,
i.e., normalize the Gini coefficient so that when negative incomes are
in the data, Gini would not be larger than 1. Since I have been using
ineqdec0 so far, I am not really familiar with the ado file of it, is
the only way to go and change the do file based on Chen's suggestion
to normalize it?
Any help on this is highly appreciated
Thank you,
--
G�l �NAL
Ph.D. Candidate,
Economics, Umass, Amherst
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