dineq (version 0.1.0)

theil.wtd: Theil index

Description

Returns the (optional weighted) Theil index for a vector.

Usage

theil.wtd(x, weights = NULL)

Arguments

x

a numeric vector containing at least non-negative elements.

weights

an optional vector of weights of x to be used in the computation of the Theil index. Should be NULL or a numeric vector.

Value

The value of the Theil index.

Details

The Theil index is a measure of inequality among values of a distribution. It is a member of the Generalized Entropy Measures. Also referred to as GE(1). The index can have a value between 0 and ln N (the logarithm of the number of values), with 0 being the lowest possible inequality. It uses a logarithmic transformation of the values of the distribution. Therefore it cannot handle negative or zero values. Those are excluded from the computation in this function. The Theil Index is more sensitive for changes in the upper tail of the distribution.

Extension of the calcGEI function in IC2 package in order to handle missings.

References

Haughton, J. and S. Khandker. (2009) Handbook on poverty and inequality, Washington, DC: World Bank.

Cowell F. (2000) Measurement of Inequality. In Atkinson A. and Bourguignon F. (eds.) Handbook of Income Distribution. Amsterdam: Elsevier, p. 87-166.

Examples

# NOT RUN {
#calculate Theil Index using Mexican Income data set
data(mex_inc_2008)

#unweighted Theil Index:
theil.wtd(mex_inc_2008$income)

#weighted Theil Index:
theil.wtd(x=mex_inc_2008$income, weights=mex_inc_2008$factor)

# }