The t-statistic approach to inference for inequality indices

Working Paper 2025-686

Abstract

Ibragimov, Kattuman, and Skrobotov (Econometric Reviews, 2025) propose a "t-statistic" approach to inference for inequality indices building on results provided by Ibragimov and Muller (Journal of Business & Economic Statistics, 2010), and they and Midoes and de Crombrugghe (Journal of Economic Inequality, 2023) evaluate its performance. We highlight a feature of the t-statistic approach – "grouping variability" – that has been understudied to date, showing how this complicates inference for inequality indices.

Authors: Nicolas Herault, Stephen P. Jenkins.