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A Review of Decomposition of Income Inequality

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Author Info
Heshmati, Almas () (MTT Economic Research and IZA Bonn)

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Abstract

This paper is a review of recent developments of parametric and non-parametric approaches to decompose inequality by subgroups, income sources, causal factors and other unit characteristics. Different methods of decomposing changes in poverty into growth, redistribution, poverty standard and residual components are described. In parametric approaches the dynamics of income accounting for transitory and permanent changes in individual and household earnings conditional of various covariates are also reviewed. Statistical inferences for inequality measurement including delta and bootstrapping and other methods to provide estimates of the sampling distribution are presented. These issues are important in the design of policy measures and expectations about their impacts on earnings inequality and poverty reductions.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1221.

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Length: 29 pages
Date of creation: Jul 2004
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Handle: RePEc:iza:izadps:dp1221

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Related research
Keywords: income inequality; poverty; decomposition; parametric; non-parametric; Gini index;

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Find related papers by JEL classification:
C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - General
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty
N30 - Economic History - - Labor and Consumers, Demography, Education, Income, and Wealth - - - General, International, or Comparative

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References listed on IDEAS
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.:
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Full references

Cited by:
(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. Heshmati, Almas, 2004. "Continental and Sub-Continental Income Inequality," IZA Discussion Papers 1271, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  2. 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!]
  3. 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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This page was last updated on 2009-11-23.

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