A Gini and concentration index decomposition with an application to the APK reranking measure
AbstractIn this paper, we suggest an alternative way to calculate the concentration index and a new matrix form approach, which can be applied both to the Gini and to the concentration index. For both indices, this approach yields expressions that are decomposable by groups and easily comparable. Our findings are illustrated by applying them to the Atkinson Plotnick Kakwani (APK) reranking measure. It is known that when a population is not homogeneous, the reranking measure can be decomposed following the suggestions of the conventional Gini index decomposition. We show that the reranking between groups and the reranking related with the overlapping term cannot be considered as measures of the tax system unfairness.
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Bibliographic InfoPaper provided by Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano in its series Departmental Working Papers with number 2010-10.
Date of creation: 24 Apr 2010
Date of revision: 13 Dec 2010
Inequality measure decomposition; reranking; reranking effect decomposition;
Find related papers by JEL classification:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
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