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An Extension of the Blinder-Oaxaca Decomposition to Non-Linear Models

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Author Info
Thomas Bauer ()
Mathias Sinning ()

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Abstract

In this paper, a general Blinder-Oaxaca decomposition is derived that can also be applied to non-linear models, which allows the differences in a non-linear outcome variable between two groups to be decomposed into a part that is explained by differences in observed characteristics and a part attributable to differences in the estimated coeffcients. Departing from this general model, we show how it can be applied to different models with discrete and limited dependent variables.

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Publisher Info
Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung in its series RWI Discussion Papers with number 0049.

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Length: 18 pages
Date of creation: Oct 2006
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Handle: RePEc:rwi:dpaper:0049

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Related research
Keywords: Blinder-Oaxaca decomposition; non-linear models;

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Find related papers by JEL classification:
C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Estimation
C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General

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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.:
  1. Bauer, Thomas & Sinning, Mathias, 2005. "Blinder-Oaxaca Decomposition for Tobit Models," CEPR Discussion Papers 5309, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Thomas Bauer & Silja Göhlmann & Mathias Sinning, 2006. "Gender Differences in Smoking Behavior," Health, Econometrics and Data Group (HEDG) Working Papers 06/07, HEDG, c/o Department of Economics, University of York. [Downloadable!]
    Other versions:
  3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October. [Downloadable!] (restricted)
    Other versions:
  4. Oaxaca, Ronald L. & Ransom, Michael R., 1994. "On discrimination and the decomposition of wage differentials," Journal of Econometrics, Elsevier, vol. 61(1), pages 5-21, March. [Downloadable!] (restricted)
  5. José Mata & José A. F. Machado, 2005. "Counterfactual decomposition of changes in wage distributions using quantile regression," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 20(4), pages 445-465. [Downloadable!]
  6. Fairlie, Robert W, 1999. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 80-108, January. [Downloadable!] (restricted)
  7. David Neumark, 1987. "Employers' discriminatory behavior and the estimation of wage discrimination," Special Studies Papers 227, Board of Governors of the Federal Reserve System (U.S.).
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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. Harald Tauchmann, 2008. "West-East Convergence in the Prevalence of Illicit Drugs: Socioeconomics or Culture?," Ruhr Economic Papers 0061, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
    Other versions:
  2. Madden, D, 2008. "Gender Differences in Mental Well- Being: A Decomposition Analysis," Health, Econometrics and Data Group (HEDG) Working Papers 08/08, HEDG, c/o Department of Economics, University of York. [Downloadable!]
    Other versions:
  3. Stefanie Schurer, 2008. "Labour Market Outcomes of Second Generation Immigrants: How Heterogeneous Are They Really?," Melbourne Institute Working Paper Series wp2008n14, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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