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Marginal effects and extending the Blinder–Oaxaca decomposition for nonlinear models

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  • Tamás Bartus

    () (Institute of Sociology and Social Policy, Corvinus University, Budapest)

Abstract

Students of racial and gender inequalities are often interested in knowing to what extent an observed group difference can be attributed to differences in returns to productive abilities (discrimination effect) or to differences in the average of productive abilities (endowment effect). The standard Blinder–Oaxaca decomposition technique, which applies to continuous outcomes, measures the discrimination (endowment) effect in terms of differences in group-specific regression parameters (means), weighted by group-specific means (regression parameters). This article shows that the standard decomposition technique can be meaningfully extended to categorical outcomes if the regression coefficients are substituted with marginal effects. A user-written program, gdecomp (working title), is also presented, which basically processes marginal effects obtained from another user-written program, margeff. It is available from the SSC Archive.

Suggested Citation

  • Tamás Bartus, 2006. "Marginal effects and extending the Blinder–Oaxaca decomposition for nonlinear models," United Kingdom Stata Users' Group Meetings 2006 05, Stata Users Group.
  • Handle: RePEc:boc:usug06:05
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    File URL: http://repec.org/usug2006/bartus_2006_london_p1.pdf
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    References listed on IDEAS

    as
    1. Yun, Myeong-Su, 2004. "Decomposing differences in the first moment," Economics Letters, Elsevier, vol. 82(2), pages 275-280, February.
    2. Ben Jann, 2005. "Standard Errors for the Blinder-Oaxaca Decomposition," German Stata Users' Group Meetings 2005 03, Stata Users Group.
    3. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    4. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
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    Cited by:

    1. Powers, Daniel A. & Yun, Myeong-Su, 2009. "Multivariate Decomposition for Hazard Rate Models," IZA Discussion Papers 3971, Institute for the Study of Labor (IZA).
    2. Renato Aguilar & Ruben Tansini, 2010. "Educación Preescolar y Rendimiento Escolar en las Escuelas Públicas de Montevideo," Documentos de Trabajo (working papers) 2010, Department of Economics - dECON.
    3. Daniel A. Powers & Hirotoshi Yoshioka & Myeong-Su Yun, 2011. "mvdcmp: Multivariate decomposition for nonlinear response models," Stata Journal, StataCorp LP, vol. 11(4), pages 556-576, December.
    4. Aguilar, Renato & Tansini, Ruben, 2010. "Pre-School Education and School Performance The Case of Public Schools in Montevideo," Working Papers in Economics 434, University of Gothenburg, Department of Economics.

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