Determinants Of Income Variability Across Population Clusters

1
Determinants Of Income Variability Across
Population Clusters

• Chonkar, Hemendra
• Gautham, Arthi
• Ghosh, Anirban
• Oberoi, Meeta

2
INTRODUCTION

• Concept
• Model the determinates of median household income
  
• Process
• Identify homogeneous population clusters
• Model the determinates of income within these
  clusters
• Critical Questions
• Are the determinants of income same across
  population clusters?
• Policy Implication If not same, then targeted
  policy initiatives appropriate
• How to measure magnitude of determining factors
• Neural Networks can model non linearity, and
  interaction terms
• Linear Regression Models standard econometric
  technique
• Analysis Implication If the two analysis forms
  produce different results, potentially recommend
  using neural networks more in econometric
  analysis

3
Process
Interpretation and Write up
Regression Analysis
Neural Networks Analysis
Cluster Interpretation (11.18.2004)
We are here
Clustering (11.15.2004)
Data download and Preprocessing (11.3.2004)
Proposal Approval
Done
Data Source Identification (10.25.2004)
Concept Creation (10. 23.2004)
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A Preliminary Cluster Solution

• Preliminary Clustering Solution on standardized
  data
• Hierarchical clustering used (Agglomerative)
• Clustering Tool Matlab
• Next Step (The ART of cluster analysis)
• Interpret the cluster means to see if reasonable
  clusters are formed
• Decide on appropriate number of clusters
• Compare results with other clustering techniques

5
Challenges

• Data Download
• Over 30,000 observations and 30 attributes
• Can download only 7000 observations and 1
  attribute per run
• Preprocessing, data transformation and data
  warehousing
• Attribute Selection
• Reference Paper and previous research experience
  used as a guide
• Correlation Analysis
• Tool Selection
• Large Dataset not supported by Weka
• Currently using
• Access, Excel Data Warehousing
• Matlab and SPSS Data Analysis

6
Project Details

• Data Source U.S Census Data from Summary File
  3, that contains data related to household
  income.
• http//factfinder.census.gov/
• Data Collected at Zip Code level (30,000 data
  points)
• Reference Paper Regional Variables in Median
  Family Income by J.H. Chesnut