Variance estimation for sensitivity analysis of poverty and inequality measures

Christian Dudel

Abstract


Estimates of poverty and inequality are often based on application of a single equivalence scale, despite the fact that a large number of different equivalence scales can be found in the literature. This paper describes a framework for sensitivity analysis which can be used to account for the variability of equivalence scales and allows to derive variance estimates of results of sensitivity analysis. Simulations show that this method yields reliable estimates. An empirical application reveals that accounting for both variability of equivalence scales and sampling variance leads to confidence intervals which are wide.

Keywords


equivalence scale; influence function; low income proportion; sensitivity analysis; variance estimation;

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DOI: http://dx.doi.org/10.18148/srm/2017.v11i1.6297

Copyright (c) 2017 Christian Dudel

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