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Inequality Decomposition - A Reconciliation

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  • Frank A Cowell
  • Carlo V. Fiorio

Abstract

We show how classic source-decomposition and subgroup-decomposition methodscan be reconciled with regression methodology used in the recent literature. We alsohighlight some pitfalls that arise from uncritical use of the regression approach. TheLIS database is used to compare the approaches using an analysis of the changingcontributions to inequality in the United States and Finland.

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File URL: http://sticerd.lse.ac.uk/dps/darp/darp100.pdf
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Bibliographic Info

Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Distributional Analysis Research Programme Papers with number 100.

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Date of creation: Apr 2009
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Handle: RePEc:cep:stidar:100

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Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

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Keywords: inequality; decomposition;

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References

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  5. Casilda Lasso de la Vega & Ana Urrutia, 2008. "The ‘Extended’ Atkinson family: The class of multiplicatively decomposable inequality measures, and some new graphical procedures for analysts," Journal of Economic Inequality, Springer, vol. 6(2), pages 211-225, June.
  6. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-44, September.
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  8. Andrea Brandolini & Timothy M. Smeeding, 2007. "Inequality Patterns in Western-Type Democracies: Cross-Country Differences and Time Changes," CHILD Working Papers wp08_07, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
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Citations

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Cited by:
  1. repec:wii:bpaper:bowp:084 is not listed on IDEAS
  2. John Creedy & Nicolas Hérault, 2011. "Decomposing Inequality and Social Welfare Changes: The Use of Alternative Welfare Metrics," Melbourne Institute Working Paper Series wp2011n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  3. repec:ese:iserwp:2012-17 is not listed on IDEAS
  4. Ayal Kimhi & Moran Sandel, 2011. "Religious Schooling, Secular Schooling, and Household Income Inequality in Israel," Working Papers 29, AlmaLaurea Inter-University Consortium.
  5. Kimhi, Ayal, 2009. "Land Reform and Farm-Household Income Inequality: The Case of Georgia," Discussion Papers 54159, Hebrew University of Jerusalem, Department of Agricultural Economics and Management.
  6. Stefan Huemer & Beatrice Scheubel & Florian Walch, 2013. "Measuring Institutional Competitiveness in Europe," CESifo Economic Studies, CESifo, vol. 59(3), pages 576-608, September.
  7. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).
  8. ERREYGERS, Guido & KESSELS, Roselinde, 2013. "Regression-based decompositions of rank-dependent indicators of socioeconomic inequality of health," Working Papers 2013007, University of Antwerp, Faculty of Applied Economics.

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