CES-WP-08-25
Estimating Trends in U.S. Income Inequality Using the Current Population Survey: The Importance of Controlling for Censoring
Richard Burkhauser, Shuaizhang Feng, Stephen Jenkins, Jeff Larrimore
August 01, 2008
Using internal and public use March Current Population Survey (CPS) data, we analyze
trends in US income inequality (1975–2004). We find that the upward trend in income inequality
prior to 1993 significantly slowed thereafter once we control for top coding in the public use data
and censoring in the internal data. Because both series do not capture trends at the very top of the
income distribution, we use a multiple imputation approach in which values for censored
observations are imputed using draws from a Generalized Beta distribution of the Second Kind
(GB2) fitted to internal data. Doing so, we find income inequality trends similar to those derived
from unadjusted internal data. Our trend results are generally robust to the choice of inequality
index, whether Gini coefficient or other commonly-used indices. When we compare our best
estimates of the income shares held by the richest tenth with those reported by Piketty and Saez
(2003), our trends fairly closely match their trends, except for the top 1 percent of the
distribution. Thus, we argue that if United States income inequality has been substantially
increasing since 1993, such increases are confined to this very high income group.
56 Pages 538583 Bytes
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CES-WP-08-24
Multi-Product Firms and Product Switching
Andrew Bernard, Stephen Redding, Peter Schott
August 01, 2008
This paper examines the frequency, pervasiveness and determinants of product switching by U.S. manufacturing firms. We find that one-half of firms alter their mix of five-digit SIC products every five years, that product switching is correlated with both firm- and firm-product attributes, and that product adding and dropping induce large changes in firm scope. The behavior we observe is consistent with a natural generalization of existing theories of industry dynamics that incorporates endogenous product selection within firms. Our findings suggest that product switching contributes to a reallocation of resources within firms towards their most efficient use.
50 Pages 425302 Bytes
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CES-WP-08-23
Supersize It: The Growth of Retail Chains and the Rise of the "Big Box" Retail Format
Emek Basker, Shawn Klimek, Pham Hoang Van
August 01, 2008
We offer a theory for the complementarity between the size of a retail chain and the
scope of its business to explain the growth of general-merchandise firms and the expansion of
the “superstore” format. The complementarity results from an interaction of the retailer’s
economies of scale and consumer gains from “one-stop shopping.” We find support for our
model in micro data from the Census of Retail Trade for 1977–2002. Retail chains with more
stores carry more distinct product lines and as retail chains grow they add both stores and
product lines. On average, we find that a chain adds one product line, such as shoes, computers,
or jewelry, to an existing store with every new store it opens. For the average large chain, adding
a new product line throughout the chain is correlated with adding 400 new stores, competing in
over 8,000 new markets and increasing its competitive pressure in more than 10,000 additional
markets.
41 Pages 765654 Bytes
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CES-WP-08-22
Products and Productivity
Andrew Bernard, Stephen Redding, Peter Schott
August 01, 2008
When firms make decisions about which product to manufacture at a more disaggregated
level than observed in the data, measured firm productivity will reflect both true differences in
productivity and non-random decisions about which products to manufacture. This paper
examines a model of industry equilibrium where firms endogenously sort across products. We
use the model to characterize the direction and magnitude of the resulting bias in productivity
and to trace the implications for evaluating the aggregate effects of policy reforms such as
industry deregulation. The endogenous sorting of firms across products provides a new source of
reallocation and leads to biased measures of deregulation’s impact on firm and aggregate
productivity.
37 Pages 457943 Bytes
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CES-WP-08-21
Health-Related Research Using Confidential U.S. Census Bureau Data
Rosemary Hyson, Alice Zawacki
August 01, 2008
Economic studies on health-related issues have the potential to benefit all Americans. The approaches for dealing with the growth of health care costs and health insurance coverage are ever changing and information is needed on their efficacy. Research on health-related topics has been conducted for about a decade at the Census Bureau’s Center for Economic Studies and the Research Data Centers. This paper begins by describing the confidential business and demographic Census Bureau data products used in this research. The discussion continues with summaries of nearly 30 papers, including how this work has benefited the Census Bureau and its research findings. Some focus on data linkages and assessing data quality, while others address important questions in the employer, public, and individual insurance markets. This research could not have been accomplished with public-use data. The newly available data from the Agency for Healthcare Research and Quality and National Center for Health Statistics, as well as additional Census Bureau data now available in the Research Data Centers are also discussed.
35 Pages 248743 Bytes
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