IDEAS home Printed from https://ideas.repec.org/p/bep/unimip/unimi-1075.html
   My bibliography  Save this paper

On determining “close equals groups” in decomposing redistributive and reranking effects

Author

Listed:
  • Achille Vernizzi

    (Dipartimento di Scienze Economiche, Aziendali e Statistiche, University of Milan)

  • Simone Pellegrino

    (Dipartimento di scienze Economiche e Finanziarie "G. Prato", University of Turin)

Abstract

Recently van De Van, Creedy and Lambert (2001) and Urban and Lambert (2008) have reconsidered the original Aronson, Johnson and Lambert (1994) decomposition of the redistributive effect in order to identify the optimal bandwidth that should be used in decomposing the redistributive effect when groups with close pre-tax incomes are considered. The methodology proposed by van De Van, Creedy and Lambert (2001) suggests choosing as the optimal bandwidth the one which maximizes the ratio between the potential effect V (which depends on the bandwidth) and the actual redistributive effect RE (which is invariant). Urban and Lambert (2008) discuss a set of further possible decompositions of the redistributive effect together with a decomposition of the Atkinson-Plotnick-Kakwani index into three terms. In this paper we want to throw some more light on the behavior of three of the main decompositions analyzed by Urban and Lambert (2008) in order to look for criteria to choose a bandwidth which allows the three different definitions of potential redistributive effect to be assumed as coherent as possible values and, in the meanwhile, to catch as much as possible of the potential vertical effect. We suggest looking for the bandwidth where the ratio between the maximum distance among the different potential vertical effect definitions and the minimum among the different potential vertical effects is minimum.

Suggested Citation

  • Achille Vernizzi & Simone Pellegrino, 2008. "On determining “close equals groups” in decomposing redistributive and reranking effects," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1075, Universitá degli Studi di Milano.
  • Handle: RePEc:bep:unimip:unimi-1075
    Note: oai:cdlib1:unimi-1075
    as

    Download full text from publisher

    File URL: http://services.bepress.com/unimi/statistics/art40
    Download Restriction: no
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bep:unimip:unimi-1075. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/damilit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/damilit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.