Grouped Data

Grouped data are not uncommon in income and wealth distribution studies. Inference about distributions with grouped data is one of my research areas (joint with several colleagues). However I am occasionally asked ,in seminars or privately, whether at the age of “big data” there is any point in working with grouped data. I think grouped data are still interesting and at present probably unavoidable in global income distribution studies for following reasons:

  • When we are dealing with large scale poverty and inequality analyses [i.e. almost all countries over several time periods] the available data sources through the World Bank or the World Institute for Development Economics Research (WIDER) are all in grouped data form. As far as I know, there is no similar source that provides individual data at such scale.
  • There are still statistically interesting questions to be studied with grouped data some of which we are going to discuss in this blog.
  • My experience shows that inferential results based on grouped data, at least under a parametric framework, are not that different from inferential results based on individual data. This of course may not be true if data has substantial irregularities and nonparametric inference is used.
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2 responses to this post.

  1. Posted by Sriram on September 22, 2015 at 11:49 pm

    – Other than inequality measurement are there any other applications of group data in economics?

    – Are there any other applications in economics where we model proportions that add to 1?

    Reply

  2. Posted by Reza on September 23, 2015 at 2:37 pm

    The methodology can be used for estimation of any distribution with grouped data and I guess interests in distributions is not confined to income. I can’t right now cite specific interesting applications for which we only have grouped data. This is of interest to me but I haven’t yet seriously looked for it. Distribution of health related variables, wealth, firm size and things like these could be potential areas in economics to look for. I have also seen studies in biology trying to estimate distribution of a particular species in a region with some sort of grouped data. There might be applications in astronomy as well.

    Reply

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