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Non-Hierarchical Bivariate Decomposition of Theil Indexes

Author

Listed:
  • Kam Ki Tang

    () (The University of Queensland)

  • Dennis Petrie

    () (The University of Dundee)

Abstract

This paper develops a method to conduct non-hierarchical bivariate decomposition of Theil indexes. The method has the merits that, first, it treats all variates symmetrically and therefore facilitates the comparison of inequalities associated with different variates and, second, it highlights the interaction between variates in the creation of inequality. The method is applied to measure gender and ethnic income inequality in Australia.

Suggested Citation

  • Kam Ki Tang & Dennis Petrie, 2009. "Non-Hierarchical Bivariate Decomposition of Theil Indexes," Economics Bulletin, AccessEcon, vol. 29(2), pages 918-927.
  • Handle: RePEc:ebl:ecbull:eb-08d30008
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    References listed on IDEAS

    as
    1. Cowell, Frank A. & Kuga, Kiyoshi, 1981. "Additivity and the entropy concept: An axiomatic approach to inequality measurement," Journal of Economic Theory, Elsevier, vol. 25(1), pages 131-143, August.
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    3. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    4. Mishra, Padmaja & Parikh, Ashok, 1992. "Household Consumer Expenditure Inequalities in India: A Decomposition Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(2), pages 225-236, June.
    5. Frank A. Cowell, 1980. "On the Structure of Additive Inequality Measures," Review of Economic Studies, Oxford University Press, vol. 47(3), pages 521-531.
    6. Pedro Conceicao & James K. Galbraith, 2000. "Constructing Long and Dense Time-Series of Inequality Using the Theil Index," Eastern Economic Journal, Eastern Economic Association, vol. 26(1), pages 61-74, Winter.
    7. Adelman, Irma & Levy, Amnon, 1984. "Decomposing Theil's Income of Income Inequality into Between and Within Components: A Note," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 30(1), pages 119-121, March.
    8. Takahiro Akita, 2003. "Decomposing regional income inequality in China and Indonesia using two-stage nested Theil decomposition method," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 37(1), pages 55-77, February.
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    Cited by:

    1. Takahiro Akita, 2017. "Educational Expansion and the Role of Education in Expenditure Inequality in Indonesia Since the 1997 Financial Crisis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(3), pages 1165-1186, February.
    2. Takahiro Akita & Sachiko Miyata, 2020. "Urban and Rural Dimensions of the Role of Education in Inequality: A Comparative Analysis between Indonesia, Myanmar, and the Philippines," Working Papers EMS_2020_04, Research Institute, International University of Japan.
    3. Dorji Lethro & Takahiro Akita, 2019. "The roles of education in expenditure inequality in Bhutan: an analysis in an urban–rural context," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 465-485, June.
    4. Takahiro Akita & Sachiko Miyata, 2013. "The roles of location and education in the distribution of economic well-being in Indonesia: hierarchical and non-hierarchical inequality decomposition analyses," Letters in Spatial and Resource Sciences, Springer, vol. 6(3), pages 137-150, November.
    5. Takahiro Akita & Sachiko Miyata, 2018. "Spatial Inequalities in Indonesia, 1996–2010: A Hierarchical Decomposition Analysis," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 138(3), pages 829-852, August.

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    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D6 - Microeconomics - - Welfare Economics

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