Duclos-Jalbert-Araar decomposition of redistributive effect: implementation issues
AbstractWhen there is a large number of pre-fiscal income equals in the sample, the redistributive effects based on the Gini index may be inappropriately estimated. Due to its roots in the Gini framework, the problem also appears in the application of the Duclos, Jalbert and Araar (2003) (DJA) decomposition of redistributive effects into vertical, classical horizontal inequity and reranking effects. This paper explains how the DJA implementation procedure must be adapted to produce correct estimates of different effects. The procedure is first illustrated on the 12-units hypothetical population and then applied to real data for the Croatian fiscal subsystem comprised of social security contributions, personal income tax, public pensions and cash social benefits.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 28068.
Date of creation: 11 Jan 2011
Date of revision:
redistributive effect; vertical equity; horizontal equity; pre-fiscal equals;
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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