Abstract
A simple statistical model is developed to assess the implications of random measurement errors in reported per capita incomes and of the bias caused by the use of official exchange rates for (1) regional per capita incomes and (2) regional income inequality. It appears that regional per capita incomes can be estimated with a fair degree of accuracy, provided that the measurement errors of the reported per capita incomes of individual countries are not too highly positively correlated. The measurement of regional inequality is characterized by considerable uncertainty.
This article first appeared in Journal of the American Statistical Association, 68 (1973), 351–539. Reprinted with the permission of the American Statistical Association.
Henri Theil is a professor and director, Centre for Mathematical Studies in Business and Economics, The University of Chicago, Ill. 60637. Mr. Friedman is lecturer, The Leon Recanati Graduate School of Business, The University of Tel-Aviv, Israel.
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© 1992 Springer Science+Business Media Dordrecht
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Theil, H., Friedman, Y. (1992). Regional Per Capita Incomes and Income Inequalities: Point Estimates and Their Standard Errors. In: Raj, B., Koerts, J. (eds) Henri Theil’s Contributions to Economics and Econometrics. Advanced Studies in Theoretical and Applied Econometrics, vol 25. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-2408-9_17
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DOI: https://doi.org/10.1007/978-94-011-2408-9_17
Publisher Name: Springer, Dordrecht
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