Regional Per Capita Incomes and Income Inequalities: Point Estimates and Their Standard Errors
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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.
KeywordsIncome Inequality Capita Income Income Share Population Share Regional Inequality
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