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Abstract:

DARP Paper
Income Mobility: A Robust Approach
Frank A Cowell and Christian Schluter
July 1998
Paper No' DARP 037:
Full Paper (pdf)

Tags: mobility measures; robustness; data contamination

The performance of two broad classes of mobility indices is examined when allowance is made for the possibility of data contamination. Single-stage indices – those that are applied directly to a sample from a multivariate income distribution – usually prove to be non-robust in the face of contamination. Two-stage models of mobility – where the distribution is first discretised and then a transition matrix or other tool is applied – may be robust if the first stage is appropriately specified. We illustrate results using a simple but flexible simulation.