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Rethinking Inequality Decomposition, With Evidence from Rural China

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Author Info
Jonathan Morduch (New York University)
Terry Sicular (University of Western Ontario)

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Abstract

We examine inequality decompositions by income source and describe a general, regression-based approach for decomposing inequality. The approach provides an efficient and flexible way to quantify the roles of variables like education and age in a multivariate context. We illustrate the method using survey data from China. The empirical results demonstrate how sharply different conclusions can emerge for different decomposition rules. We explain how these differences reflect the treatment of equally-distributed sources of income, and we discuss implications for how results from inequality decomposition are interpreted. Copyright Royal Economic Society 2002

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 112 (2002)
Issue (Month): 476 (January)
Pages: 93-106
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Handle: RePEc:ecj:econjl:v:112:y:2002:i:476:p:93-106

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ronald Oaxaca, . "Male-Female Wage Differentials in Urban Labor Markets," Working Papers 396, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
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  2. Benjamin, Dwayne & Brandt, Loren, 1997. "Land, Factor Markets, and Inequality in Rural China: Historical Evidence," Explorations in Economic History, Elsevier, vol. 34(4), pages 460-494, October. [Downloadable!] (restricted)
  3. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February. [Downloadable!] (restricted)
  4. James E. Foster & Efe A. Ok, 1999. "Lorenz Dominance and the Variance of Logarithms," Econometrica, Econometric Society, vol. 67(4), pages 901-908, July.
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  5. Fei, John C H & Rainis, Gustav & Kuo, Shirley W Y, 1978. "Growth and the Family Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 17-53, February. [Downloadable!] (restricted)
  6. Jonathan Morduch & Terry Sicular, 1998. "Rethinking Inequality Decomposition, with Evidence from Rural China," Harvard Institute of Economic Research Working Papers 1831, Harvard - Institute of Economic Research.
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  7. Morduch, Jonathan & Sicular, Terry, 2000. "Politics, growth, and inequality in rural China: does it pay to join the Party?," Journal of Public Economics, Elsevier, vol. 77(3), pages 331-356, September. [Downloadable!] (restricted)
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  8. Shorrocks, Anthony F, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, MIT Press, vol. 98(2), pages 311-26, May. [Downloadable!] (restricted)
  9. Knight, J. & Shi, L., 1996. "Cumulative Causation and Inequality Among Villages in China," Economics Series Working Papers 99186, University of Oxford, Department of Economics.
  10. Jyotsna Jalan & Martin Ravallion, 1998. "Geographic Poverty Traps?," Boston University - Institute for Economic Development 86, Boston University, Institute for Economic Development.
  11. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January. [Downloadable!] (restricted)
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Carlo V. Fiorio, 2006. "Understanding Inequality Trends:Microsimulation Decomposition for Italy," STICERD - Distributional Analysis Research Programme Papers 78, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
  2. Stéphane Mussard, 2006. "La décomposition des mesures d’inégalité en sources de revenu : l’indice de Gini et les généralisations," Cahiers de recherche 06-05, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke. [Downloadable!]
  3. De Hoyos, Rafael E., 2007. "Accounting for Mexican income inequality during the 1990s," Policy Research Working Paper Series 4224, The World Bank. [Downloadable!]
  4. Yannis Bilias & Dimitris Georgarakos & Michael Haliassos, 2005. "Equity Culture and the Distribution of Wealth," CFS Working Paper Series 2005/20, Center for Financial Studies. [Downloadable!]
    Other versions:
  5. Heshmati, Almas, 2004. "A Review of Decomposition of Income Inequality," IZA Discussion Papers 1221, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Paul A. Kattuman & Barbara M. Roberts, 2000. "Strategy Choices of Firms and Market Structure," Discussion Papers in Economics 00/10, Department of Economics, University of Leicester. [Downloadable!]
  7. Heshmati, Almas, 2004. "Data Issues and Databases Used in Analysis of Growth, Poverty and Economic Inequality," IZA Discussion Papers 1263, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Dwayne Benjamin & Loren Brandt & John Giles, 2003. "The Evolution of Income Inequality in Rural China," Working Papers benjamin-04-01, University of Toronto, Department of Economics. [Downloadable!]
    Other versions:
  9. Jonathan Morduch & Terry Sicular, 2002. "Rethinking Inequality Decomposition, With Evidence from Rural China," Economic Journal, Royal Economic Society, vol. 112(476), pages 93-106, January. [Downloadable!] (restricted)
    Other versions:
  10. Ramani Gunatilaka & Duangkamon Chotikapanich, 2006. "Inequality Trends and Determinants in Sri Lanka 1980-2002: A Shapley Approach to Decomposition," Monash Econometrics and Business Statistics Working Papers 6/06, Monash University, Department of Econometrics and Business Statistics. [Downloadable!]
  11. Stéphane Mussard & Pi Alperin María Noel & Françoise Seyte & Michel Terraza, 2005. "Extensions Of Dagum’S Gini Decomposition," Cahiers de recherche 05-07, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke. [Downloadable!]
  12. Francisco Azpitarte, 2008. "The Household Wealth Distribution in Spain: The Role of Housing and Financial Wealth," Working Papers 83, ECINEQ, Society for the Study of Economic Inequality. [Downloadable!]
  13. Heshmati, Almas, 2004. "Regional Income Inequality in Selected Large Countries," IZA Discussion Papers 1307, Institute for the Study of Labor (IZA). [Downloadable!]
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