Decomposition of inequality change into pro-poor growth and mobility components: -dsginideco-
This short talk describes the module -dsginideco- which decomposes the change in income inequality between two time periods into two components, one representing the progressivity (pro-poorness) of income growth, and the other representing reranking. Inequality is measured using the generalized Gini coefficient, also known as the S-Gini, G(v). This is a distributionally-sensitive inequality index, with larger values of v placing greater weight on inequality differences among poorer (lower ranked) observations. The conventional Gini coefficient corresponds to thecase v = 2. The decomposition is of the form: final-period inequality - initial-period inequality = R - P where R is a measure of reranking, and P is a measure of the progressivity of income growth. For full details of the decomposition and an application, see S.P. Jenkins and P. Van Kerm (2006), "Trends in income inequality, pro-poor income growth and income mobility", Oxford Economic Papers, 58(3): 531-548.