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Decomposing Socioeconomic Inequality of Health

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  • Guido Erreygers
  • Roselinde Kessels
  • Linkun Chen
  • Philip Clarke

Abstract

We consider three different types of decomposition analysis: decomposition by health components, decomposition by subgroups, and regression-based decomposition. We show that level-dependent indices perform better than rank-dependent indices. We explore different approaches to decompose or explain socioeconomic inequality of health. The first looks at the contributions of components of health, the second aims to split inequality into between- and within-group inequality, and the third uses regression techniques. Our paper compares the decomposition properties of both rank-dependent and level-dependent indices of socioeconomic inequality of health. As far as decomposition by components and regression-based decomposition is concerned, there are no essential differences between the types of indices. When it comes to decomposition by population subgroups, however, level-dependent indices are clearly superior. The fact that the basic level-dependent index can be decomposed perfectly into a 'within' and a 'between' component, and the extended level-dependent index nearly so, constitutes a strong argument in favour of using these indices alongside, and maybe even instead of, the still dominant rank-dependent indices.

Suggested Citation

  • Guido Erreygers & Roselinde Kessels & Linkun Chen & Philip Clarke, 2016. "Decomposing Socioeconomic Inequality of Health," EcoMod2016 9574, EcoMod.
  • Handle: RePEc:ekd:009007:9574
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    Australia; Miscellaneous; Modeling: new developments;
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