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Revisiting Between-Group Inequality Measurement: An Application to the Dynamics of Caste Inequality in Two Indian Villages

  • Lanjouw, Peter
  • Rao, Vijayendra

Summary Standard approaches to decomposing how much group differences contribute to inequality rarely show significant between-group inequality, and are of limited use in comparing populations with different numbers of groups. We apply an adaptation to the standard approach that remedies these problems to longitudinal household data from two Indian villages--Palanpur in the north and Sugao in the west. In Palanpur we find that the largest Scheduled Caste group failed to share in the gradual rise in village prosperity. This would not have emerged from standard decomposition analysis. However, in Sugao the alternative procedure does not yield any additional insights because income gains have applied relatively evenly across castes.

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Article provided by Elsevier in its journal World Development.

Volume (Year): 39 (2011)
Issue (Month): 2 (February)
Pages: 174-187

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Handle: RePEc:eee:wdevel:v:39:y:2011:i:2:p:174-187
Contact details of provider: Web page: http://www.elsevier.com/locate/worlddev

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  1. Cowell, Frank A & Jenkins, Stephen P, 1995. "How Much Inequality Can We Explain? A Methodology and an Application to the United States," Economic Journal, Royal Economic Society, vol. 105(429), pages 421-30, March.
  2. Ashwini Deshpande, 2000. "Does Caste Still Define Disparity? A Look at Inequality in Kerala, India," American Economic Review, American Economic Association, vol. 90(2), pages 322-325, May.
  3. Frank Cowell, 1998. "Measurement of inequality," LSE Research Online Documents on Economics 2084, London School of Economics and Political Science, LSE Library.
  4. Shorrocks, Anthony & Wan, Guanghua, 2004. "Spatial Decomposition of Inequality," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  5. Lanjouw, Peter & Stern, Nicholas, 1998. "Economic Development in Palanpur over Five Decades," OUP Catalogue, Oxford University Press, number 9780198288329, March.
  6. Cowell, Frank A, 1980. "On the Structure of Additive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 47(3), pages 521-31, April.
  7. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
  8. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan A. & Ozler, Berk, 2005. "Re-interpreting sub-group inequality decompositions," Policy Research Working Paper Series 3687, The World Bank.
  9. Bliss, C. J. & Stern, N. H., 1982. "Palanpur: The Economy of an Indian Village," OUP Catalogue, Oxford University Press, number 9780198284192, March.
  10. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-20, July.
  11. Rohit Mutatkar, 2005. "Social group disparities and poverty in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2005-004, Indira Gandhi Institute of Development Research, Mumbai, India.
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