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Between group inequality and targeted transfers

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  • Wodon, Quentin T.

Abstract

The author provides two extensions to Yitzhaki and Lerman's group decomposition of the Gini index. First, he analyzes stratification (within the group) and inequality (between groups) along several dimensions at once. This makes the determinants of inequality more understandable. Second, he derives the impact on the Gini of marginal changes in income or consumption by group. This can be used to evaluate targeted redistributive policies or to assess the impact of exogenous shocks by group. He applies the analysis to data from Bangladesh, with a focus on how inequality affects land ownership, education, and occupation. Education appears to be a stronger determinant of inequality than occupation, with land ownership ranking third. Marginal targeted transfers and taxes have more effect on redistribution when applied to education (from the well-educated to the illiterate) or occupation groups (from officials and managers to tenants and agricultural workers).

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2075.

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Date of creation: 31 Mar 1999
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Handle: RePEc:wbk:wbrwps:2075

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Related research

Keywords: Services&Transfers to Poor; Environmental Economics&Policies; Economic Theory&Research; Poverty Impact Evaluation; Drylands&Desertification; Inequality; Environmental Economics&Policies; Poverty Impact Evaluation; Services&Transfers to Poor; Rural Poverty Reduction;

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References

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  1. Lerman, Robert I. & Yitzhaki, Shlomo, 1984. "A note on the calculation and interpretation of the Gini index," Economics Letters, Elsevier, vol. 15(3-4), pages 363-368.
  2. Lerman, Robert I. & Yitzhaki, Shlomo, 1989. "Improving the accuracy of estimates of Gini coefficients," Journal of Econometrics, Elsevier, vol. 42(1), pages 43-47, September.
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Cited by:
  1. Quentin Wodon, 2000. "Microdeterminants of consumption, poverty, growth, and inequality in Bangladesh," Applied Economics, Taylor & Francis Journals, vol. 32(10), pages 1337-1352.
  2. Kwang Soo Cheong, 1999. "Economic Crisis and Income Inequality in Korea," Working Papers 199906, University of Hawaii at Manoa, Department of Economics.
  3. Stéphane Mussard & Pi Alperin María Noel & Françoise Seyte & Michel Terraza, 2005. "Extensions Of Dagum’S Gini Decomposition," Cahiers de recherche 05-07, Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke.

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