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Inequality factor decompotition under uniform additions property with applications to Cameroonian rural data

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  • Chameni Nembua, Célestin

Abstract

This paper proposes new factors decomposition methods for classical inequality indices such as Gini index, variance and squared coefficient of variations index. The approach consists in relaxing the normalization property in order to extend the natural decomposition to a decomposition rule which satisfies the uniform additions property. The regression-based method using the new formulations of components contributions is carried out. Empirical examples, using Cameroonian data, are provided to demonstrate the use of the procedure and to contrast our results to those based on Morduch and Sicular (2002) principle, especially in the case of the Gini index.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31250.

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Date of creation: 2009
Date of revision: 2009
Handle: RePEc:pra:mprapa:31250

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Keywords: Inequality factors decomposition; uniform additions property; regression-based. decomposition; Cameroon.;

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  1. Jonathan Morduch & Terry Sicular, 1998. "Rethinking Inequality Decomposition, with Evidence from Rural China," Harvard Institute of Economic Research Working Papers 1831, Harvard - Institute of Economic Research.
  2. Wan, Guanghua, 2002. "Regression-based Inequality Decomposition: Pitfalls and a Solution Procedure," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  3. Frank Cowell & Carlo V. Fiorio, 2006. "Rethinking inequality decomposition: comment," LSE Research Online Documents on Economics 3782, London School of Economics and Political Science, LSE Library.
  4. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
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