Accounting for income distribution trends: A density function decomposition approach
AbstractThis paper develops methods for decomposing changes in the income distribution using subgroup decompositions of the income density function. Overall changes are related to changes in subgroup shares and changes in subgroup densities, where the latter are broken down further using elementary transformations of individual incomes. These density decompositions are analogous to the widely-used decompositions of inequality indices by population subgroup, except that they summarize multiple features of the income distribution (using graphs), rather than focusing on a specific feature such as dispersion, and are not dependent on the choice of a specific summary index. Nonetheless, since inequality and poverty indices can be expressed as PDF functionals, our density-based methods can also be used to provide numerical decompositions of these. An application of the methods reveals the multi-faceted nature of UK income distribution trends during the 1980s. Copyright Springer 2005
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Bibliographic InfoArticle provided by Springer in its journal The Journal of Economic Inequality.
Volume (Year): 3 (2005)
Issue (Month): 1 (April)
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Web page: http://springerlink.metapress.com/link.asp?id=111137
density functions; income distribution; inequality; subgroup decompositions;
Other versions of this item:
- Jenkins, Stephen P. & Van Kerm, Philippe, 2004. "Accounting for Income Distribution Trends: A Density Function Decomposition Approach," IZA Discussion Papers 1141, Institute for the Study of Labor (IZA).
- Jenkins, Stephen P. & Van Kerm, Philippe, 2004. "Accounting for income distribution trends: A density function decomposition approach," IRISS Working Paper Series 2004-07, IRISS at CEPS/INSTEAD.
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
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- Cowell, F.A., 2000. "Measurement of inequality," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166 Elsevier.
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- Mary C. Daly & Robert G. Valletta, 2000. "Inequality and poverty in the United States: the effects of changing family behavior and rising wage dispersion," Working Papers in Applied Economic Theory 2000-06, Federal Reserve Bank of San Francisco.
- Philippe Van Kerm, 2003.
"Adaptive kernel density estimation,"
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- Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
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