IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/85584.html
   My bibliography  Save this paper

Shapley Decomposition by Components of a Welfare Aggregate

Author

Listed:
  • Azevedo, Joao Pedro
  • Sanfelice, Viviane
  • Nguyen, Minh C.

Abstract

We present an exercise to account for changes in an indicator into components of a welfare aggregate. The decomposition presented in this paper focus on the distribution of the welfare variable rather than a decomposable indicator. Thus, it is a statistical exercise in which we assume that we can in fact modify one factor at a time and keep everything else constant. This paper contributes to the existing literature by applying the concept of a Shapley decomposition to deal with the path dependence that arises from changing one element at a time. Although, the interpretation changes, the proposed decomposition is applicable to both the case of panel data as well as repeated cross section and allows accounting the contribution of each component to change in any given indicator.

Suggested Citation

  • Azevedo, Joao Pedro & Sanfelice, Viviane & Nguyen, Minh C., 2012. "Shapley Decomposition by Components of a Welfare Aggregate," MPRA Paper 85584, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:85584
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/85584/1/MPRA_paper_85584.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Paul, Satya, 2004. "Income sources effects on inequality," Journal of Development Economics, Elsevier, vol. 73(1), pages 435-451, February.
    2. Stephen P. Jenkins & Philippe Van Kerm, 2006. "Trends in income inequality, pro-poor income growth, and income mobility," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 531-548, July.
    3. François Bourguignon, 2011. "Non-anonymous growth incidence curves, income mobility and social welfare dominance," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 9(4), pages 605-627, December.
    4. Fortin, Nicole & Lemieux, Thomas & Firpo, Sergio, 2011. "Decomposition Methods in Economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 1, pages 1-102, Elsevier.
    5. Essama-Nssah, B., 2012. "Identification of sources of variation in poverty outcomes," Policy Research Working Paper Series 5954, The World Bank.
    6. Shaohua Chen & Martin Ravallion, 2010. "The Developing World is Poorer than We Thought, But No Less Successful in the Fight Against Poverty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(4), pages 1577-1625.
    7. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    8. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    9. Mauro Mussini, 2013. "A matrix approach to the Gini index decomposition by subgroup and by income source," Applied Economics, Taylor & Francis Journals, vol. 45(17), pages 2457-2468, June.
    10. Ricardo Paes de Barros & Mirela de Carvalho & Samuel Franco & Rosane Mendonça, 2006. "Uma Análise das Principais Causas da Queda Recente na Desigualdade de Renda Brasileira," Discussion Papers 1203, Instituto de Pesquisa Econômica Aplicada - IPEA.
    11. Ferreira , Francisco H. G., 2010. "Distributions in motion: economic growth, inequality, and poverty dynamics," Policy Research Working Paper Series 5424, The World Bank.
    12. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    13. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
    14. Datt, Gaurav & Ravallion, Martin, 1992. "Growth and redistribution components of changes in poverty measures : A decomposition with applications to Brazil and India in the 1980s," Journal of Development Economics, Elsevier, vol. 38(2), pages 275-295, April.
    15. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," The World Bank Economic Review, World Bank, vol. 11(2), pages 357-382, May.
    16. Martin Fournier, 2001. "Inequality decomposition by factor component : a “rank-correlation” approach illustrated on the Taiwanese case," Recherches économiques de Louvain, De Boeck Université, vol. 67(4), pages 381-403.
    17. Dollar, David & Kraay, Aart, 2002. "Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    18. Stanislav Kolenikov & Anthony Shorrocks, 2005. "A Decomposition Analysis of Regional Poverty in Russia," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 25-46, February.
    19. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
    20. Martin FOURNIER, 2001. "Inequality decomposition by factor component : a “rank-correlation” approach illustrated on the Taiwanese case," Discussion Papers (REL - Recherches Economiques de Louvain) 2001042, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bruch, Sarah K. & van der Naald, Joseph & Gornick, Janet C., 2022. "Poverty Reduction through Federal and State Policy Mechanisms: Variation Over Time and Across the U.S. States," SocArXiv jz5xp, Center for Open Science.
    2. Azevedo,Joao Pedro Wagner De & Goldemberg,Diana & Montoya,Silvia & Nayar,Reema & Rogers,F. Halsey & Saavedra,Jaime & Stacy,Brian William, 2021. "Will Every Child Be Able to Read by 2030 ? Defining Learning Poverty and Mapping the Dimensions of the Challenge," Policy Research Working Paper Series 9588, The World Bank.
    3. Touhami Abdelkhalek & Dorothee Boccanfuso, 2023. "Is the Moroccan Fiscal System Progressive ? A Shapley Decomposition," Policy notes & Policy briefs 2026, Policy Center for the New South.
    4. Kseniya Abanokova & Hai-Anh H. Dang, 2023. "Poverty in Russia: a bird’s-eye view of trends and dynamics in the past quarter of a century," Chapters, in: Jacques Silber (ed.), Research Handbook on Measuring Poverty and Deprivation, chapter 58, pages 627-635, Edward Elgar Publishing.
    5. David Rothwell & Annie McEwen, 2018. "Child Poverty and Family Structure during the Recession in English-Speaking Liberal Welfare States," LIS Working papers 665, LIS Cross-National Data Center in Luxembourg.
    6. Mr. Antonio David & Mr. Martin Petri, 2013. "Inclusive Growth and the Incidence of Fiscal Policy in Mauritius: Much Progress, But More Could be Done," IMF Working Papers 2013/116, International Monetary Fund.
    7. Mager, Gregor & Faße, Anja, 2021. "The Contribution of Smallholders´ Livelihood Activities on Income Inequality and Poverty: Case Study from Rural Tanzania," 2021 Conference, August 17-31, 2021, Virtual 315405, International Association of Agricultural Economists.
    8. Azevedo, Joao Pedro & Inchauste, Gabriela & Olivieri, Sergio & Saavedra, Jaime & Winkler, Hernan, 2013. "Is labor income responsible for poverty reduction ? a decomposition approach," Policy Research Working Paper Series 6414, The World Bank.
    9. Yingfeng Fang & Fen Zhang, 2021. "The Future Path To China’s Poverty Reduction—Dynamic Decomposition Analysis With The Evolution Of China’s Poverty Reduction Policies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(2), pages 507-538, December.
    10. World Bank Group, 2015. "Poverty and Shared Prosperity in Brazil's Metropolitan Regions," World Bank Publications - Reports 22316, The World Bank Group.
    11. Alessandra Brito & Miguel Foguel & Celia Kerstenetzky, 2017. "The contribution of minimum wage valorization policy to the decline in household income inequality in Brazil: A decomposition approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 40(4), pages 540-575, October.
    12. Zaman, Qamar uz & Zhao, Yuhuan & Zaman, Shah & Alenezi, Marim & Jehan, Noor, 2023. "Spatial evaluation of multidimensional energy poverty between farming and non-farming communities of agro-climatic zones of Pakistan," Energy Policy, Elsevier, vol. 172(C).
    13. Azevedo, Joao Pedro & Atamanov, Aziz, 2014. "Pathways to the middle class in Turkey : how have reducing poverty and boosting shared prosperity helped?," Policy Research Working Paper Series 6834, The World Bank.
    14. Balcazar Salazar,Carlos Felipe & Desai,Sonal & Murgai,Rinku & Narayan,Ambar, 2016. "Why did poverty decline in India ? a nonparametric decomposition exercise," Policy Research Working Paper Series 7602, The World Bank.
    15. Robles, Adrian & Robles, Marcos, 2016. "Changes in Welfare with a Heterogeneous Workforce: The Case of Peru," IDB Publications (Working Papers) 7507, Inter-American Development Bank.
    16. Piotr Paradowski & Joanna Wolszczak-Derlacz & Eva Sierminska, 2020. "Inequality, Poverty and Child Benefits: Evidence from a Natural Experiment," LIS Working papers 799, LIS Cross-National Data Center in Luxembourg.
    17. Azevedo, Joao Pedro & Inchauste, Gabriela & Sanfelice, Viviane, 2013. "Decomposing the recent inequality decline in Latin America," Policy Research Working Paper Series 6715, The World Bank.
    18. Pérez Pérez,Jorge Eduardo & Rodriguez Castelan,Carlos & Trujillo,Jose Daniel & Valderrama,Daniel, 2015. "Unpacking the MPI : a decomposition approach of changes in multidimensional poverty headcounts," Policy Research Working Paper Series 7514, The World Bank.
    19. Chuliang Luo, 2022. "Decomposition Analysis of Poverty Reduction in Rural China: 2007–2018," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(2), pages 142-166, March.
    20. Orozco, Jorge & Vargas, Andrés & Perilla , Juan & Gómez, Carla, 2023. "Contribución de la informalidad a la reducción de la pobreza: un ejercicio de descomposición para las ciudades colombianas," Documentos Departamento de Economía 55, Universidad del Norte.
    21. World Bank Group, 2015. "Kyrgyz Republic," World Bank Publications - Reports 22957, The World Bank Group.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
    2. Azevedo, Joao Pedro & Inchauste, Gabriela & Sanfelice, Viviane, 2013. "Decomposing the recent inequality decline in Latin America," Policy Research Working Paper Series 6715, The World Bank.
    3. Azevedo, Joao Pedro & Inchauste, Gabriela & Olivieri, Sergio & Saavedra, Jaime & Winkler, Hernan, 2013. "Is labor income responsible for poverty reduction ? a decomposition approach," Policy Research Working Paper Series 6414, The World Bank.
    4. Bluhm, Richard & de Crombrugghe, Denis & Szirmai, Adam, 2018. "Poverty accounting," European Economic Review, Elsevier, vol. 104(C), pages 237-255.
    5. GOH, Chor-ching & LUO, Xubei & ZHU, Nong, 2009. "Income growth, inequality and poverty reduction: A case study of eight provinces in China," China Economic Review, Elsevier, vol. 20(3), pages 485-496, September.
    6. Essama-Nssah, , B. & Bassol3, Leandre & Paul, Saumik, 2010. "Accounting for heterogeneity in growth incidence in Cameroon," Policy Research Working Paper Series 5464, The World Bank.
    7. Peter Lindner, 2015. "Factor decomposition of the wealth distribution in the euro area," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(2), pages 291-322, May.
    8. Richard Bluhm & Denis de Crombrugghe & Adam Szirmai, 2016. "Poverty Accounting. A fractional response approach to poverty decomposition," Working Papers 413, ECINEQ, Society for the Study of Economic Inequality.
    9. Essama-Nssah, B., 2012. "Identification of sources of variation in poverty outcomes," Policy Research Working Paper Series 5954, The World Bank.
    10. Marta Castilho & Marta Menéndez & Aude A. Sztulman, 2015. "Poverty and Inequality Dynamics in Manaus: Legacy of a Free Trade Zone?," Working Papers halshs-01245394, HAL.
    11. Flaviana Palmisano & Vito Peragine, 2015. "The Distributional Incidence of Growth: A Social Welfare Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(3), pages 440-464, September.
    12. Adriaan Kalwij & Arjan Verschoor, 2005. "A Decomposition of Poverty Trends Across Regions: the Role of Variation in the Income and Inequality Elasticities of Poverty," WIDER Working Paper Series RP2005-36, World Institute for Development Economic Research (UNU-WIDER).
    13. Bluhm R & Crombrugghe D.P.I. de & Szirmai A., 2013. "The pace of poverty reduction - A fractional response approach," MERIT Working Papers 2013-051, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Muller, Adrian, 2006. "Clarifying Poverty Decomposition," Working Papers in Economics 217, University of Gothenburg, Department of Economics, revised 17 Nov 2008.
    15. Fosu, Augustin Kwasi, 2017. "Growth, inequality, and poverty reduction in developing countries: Recent global evidence," Research in Economics, Elsevier, vol. 71(2), pages 306-336.
    16. Ferreira, Francisco H.G. & Leite, Phillippe G. & Ravallion, Martin, 2010. "Poverty reduction without economic growth?: Explaining Brazil's poverty dynamics, 1985-2004," Journal of Development Economics, Elsevier, vol. 93(1), pages 20-36, September.
    17. Meng, Xin & Gregory, Robert & Wang, Youjuan, 2005. "Poverty, inequality, and growth in urban China, 1986-2000," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 710-729, December.
    18. Inchauste, Gabriela & Azevedo, João Pedro & Olivieri, Sergio & Saavedra, Jaime & Winkler, Hernan, 2012. "When Job Earnings Are behind Poverty Reduction," World Bank - Economic Premise, The World Bank, issue 97, pages 1-6, November.
    19. Ceriani,Lidia & Inchauste Comboni,Maria Gabriela & Olivieri,Sergio Daniel, 2015. "Understanding poverty reduction in Sri Lanka : evidence from 2002 to 2012/13," Policy Research Working Paper Series 7446, The World Bank.
    20. Flaviana Palmisano, 2012. "The distributional incidence of growth: a non-anonymous and rank dependent approach," SERIES 0039, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Jul 2012.

    More about this item

    Keywords

    Microdecompositions; Shapley value; Poverty; Inequality;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D6 - Microeconomics - - Welfare Economics
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:85584. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.