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A Unified Framework to Decomposing Inequality with Illustrations to Some Arab Countries

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  • Sami Bibi
  • AbdelRahmen El-Lahga

    (University of Tunis)

Abstract

It is common to decompose the inequality indices of the General Entropy class to understand economic inequality and guide the design of economic policy. Elbers et al. (2008) suggest an improved approach to inequality decomposition of those indices which is less sensitive to the degree of sub-partitioning of population groups than the conventional decompositions. In this paper, we extend the approach of Elbers et al. (2008) to the ß class of inequality indices which includes a large variety of inequality indices. This class generalizes and comprises different well-known families of inequality indices as particular cases. Moreover, some of its members enable to focus on a particular part of the income distribution at which redistributive policies could be aimed. We illustrate our methodology using micro datasets from six Arab countries to offer a reassessment of between-group inequality in these countries.

Suggested Citation

  • Sami Bibi & AbdelRahmen El-Lahga, 2011. "A Unified Framework to Decomposing Inequality with Illustrations to Some Arab Countries," Working Papers 618, Economic Research Forum, revised 08 Jan 2011.
  • Handle: RePEc:erg:wpaper:618
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    References listed on IDEAS

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    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. Sami Bibi & Jean‐Yves Duclos, 2010. "A Comparison Of The Poverty Impact Of Transfers, Taxes And Market Income Across Five Oecd Countries," Bulletin of Economic Research, Wiley Blackwell, vol. 62(4), pages 387-406, October.
    3. Yitzhaki, Shlomo, 1983. "On an Extension of the Gini Inequality Index," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 617-628, October.
    4. Rolf Aaberge, 2007. "Gini’s nuclear family," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(3), pages 305-322, December.
    5. Chris Elbers & Peter Lanjouw & Johan Mistiaen & Berk Özler, 2008. "Reinterpreting between-group inequality," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 6(3), pages 231-245, September.
    6. Ravi Kanbur, 2006. "The policy significance of inequality decompositions," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(3), pages 367-374, December.
    7. Sami Bibi & AbdelRahmen El-Lahga, 2010. "A Unified Framework to Measuring Inequality in The Arab Countries," Working Papers 567, Economic Research Forum, revised 11 Jan 2010.
    8. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
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