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A matrix approach to the Gini index decomposition by subgroup and by income source

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  • Mauro Mussini

Abstract

The literature offers two main ways of decomposing the Gini index: decomposition by population subgroup and by income source. This article proposes merging the two decomposition dimensions by suggesting a matrix formula for the Gini index which permits the simultaneous decomposition by subgroup and by income source. Using this multi‐decomposition, one can investigate the role of the interaction between the subgroup and the source components in determining the overall inequality. We apply the methodology to sample data on Italian household incomes collected in 2008.

Suggested Citation

  • 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.
  • Handle: RePEc:taf:applec:45:y:2013:i:17:p:2457-2468
    DOI: 10.1080/00036846.2012.667553
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    File URL: http://hdl.handle.net/10.1080/00036846.2012.667553
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    References listed on IDEAS

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    1. Maria Giovanna MONTI, 2007. "A note on the Dagum decomposition of the Gini inequality index," Departmental Working Papers 2007-16, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
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    Cited by:

    1. Ogwang Tomson, 2016. "The Marginal Effects in Subgroup Decomposition of the Gini Index," Journal of Official Statistics, De Gruyter Open, vol. 32(3), pages 733-745, September.
    2. repec:exl:29stat:v:17:y:2016:i:2:p:221-236 is not listed on IDEAS
    3. Mauro Mussini, 2016. "On Measuring Income Polarization: An Approach Based On Regression Trees," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 17(2), pages 221-236, June.
    4. Mussini, Mauro & Grossi, Luigi, 2015. "Decomposing changes in CO2 emission inequality over time: The roles of re-ranking and changes in per capita CO2 emission disparities," Energy Economics, Elsevier, vol. 49(C), pages 274-281.
    5. Jurkatis, Simon & Strehl, Wolfgang, 2014. "Gini decompositions and Gini elasticities: On measuring the importance of income sources and population subgroups for income inequality," Discussion Papers 2014/22, Free University Berlin, School of Business & Economics.
    6. Mussini, Mauro, 2013. "On decomposing inequality and poverty changes over time: A multi-dimensional decomposition," Economic Modelling, Elsevier, vol. 33(C), pages 8-18.

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