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Decomposition of the Gini Index by Sources of Income

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  • Alina Jędrzejczak

Abstract

The Gini concentration coefficient is considered to be the best synthetic inequality measure and is widely used in economic research. In this paper, we present its decomposition by factor components with an application to income distributions in Poland. Income inequality measures proposed by Gini, Zenga and Bonferroni are calculated for different socio-economic groups based on their exclusive or primary source of maintenance. For theoretical income distribution, the Dagum type-I model was used. The basis for the calculations was the individual data coming from the Household Budgets Survey conducted quarterly by the Polish Central Statistical Office. Using the decomposition of inequality by source, we were able to examine how changes in particular income components affected overall inequality. Copyright International Atlantic Economic Society 2008

Suggested Citation

  • Alina Jędrzejczak, 2008. "Decomposition of the Gini Index by Sources of Income," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(4), pages 441-447, November.
    • Handle: RePEc:kap:iaecre:v:14:y:2008:i:4:p:441-447:10.1007/s11294-008-9175-6
    DOI: 10.1007/s11294-008-9175-6
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    References listed on IDEAS

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    1. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-156, February.
    2. Lerman, Robert I. & Yitzhaki, Shlomo, 1984. "A note on the calculation and interpretation of the Gini index," Economics Letters, Elsevier, vol. 15(3-4), pages 363-368.
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    More about this item

    Keywords

    Income inequality; Income distribution; C10; J30;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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