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An extension of the Blinder–Oaxaca decomposition to nonlinear models

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  • Thomas Bauer
  • Mathias Sinning

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Abstract

In this paper, a general Blinder-Oaxaca decomposition is derived that can also be applied to non-linear models, which allows the differences in a non-linear outcome variable between two groups to be decomposed into a part that is explained by differences in observed characteristics and a part attributable to differences in the estimated coeffcients. Departing from this general model, we show how it can be applied to different models with discrete and limited dependent variables.

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File URL: http://hdl.handle.net/10.1007/s10182-008-0056-3
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Bibliographic Info

Article provided by Springer in its journal AStA Advances in Statistical Analysis.

Volume (Year): 92 (2008)
Issue (Month): 2 (May)
Pages: 197-206

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Handle: RePEc:spr:alstar:v:92:y:2008:i:2:p:197-206

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Related research

Keywords: Blinder–Oaxaca decomposition; Nonlinear regression models; General econometric methods;

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References

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  1. Fitzenberger, Bernd & Kohn, Karsten & Wang, Qingwei, 2006. "The Erosion of Union Membership in Germany: Determinants, Densities, Decompositions," IZA Discussion Papers 2193, Institute for the Study of Labor (IZA).
  2. Melly, Blaise, 2005. "Decomposition of differences in distribution using quantile regression," Labour Economics, Elsevier, vol. 12(4), pages 577-590, August.
  3. Bauer, Thomas K. & Göhlmann, Silja & Sinning, Mathias, 2006. "Gender Differences in Smoking Behavior," IZA Discussion Papers 2259, Institute for the Study of Labor (IZA).
  4. Yun, Myeong-Su, 2003. "Decomposing Differences in the First Moment," IZA Discussion Papers 877, Institute for the Study of Labor (IZA).
  5. Bauer, Thomas K. & Sinning, Mathias, 2005. "Blinder-Oaxaca Decomposition for Tobit Models," IZA Discussion Papers 1795, Institute for the Study of Labor (IZA).
  6. David Neumark, 1987. "Employers' discriminatory behavior and the estimation of wage discrimination," Special Studies Papers 227, Board of Governors of the Federal Reserve System (U.S.).
  7. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  8. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March.
  9. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
  10. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465.
  11. Bauer, Thomas K. & Sinning, Mathias, 2005. "The Savings Behavior of Temporary and Permanent Migrants in Germany," IZA Discussion Papers 1632, Institute for the Study of Labor (IZA).
  12. Fairlie, Robert, 2014. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Santa Cruz Department of Economics, Working Paper Series qt49c4n0fg, Department of Economics, UC Santa Cruz.
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