Further theoretical results on the regression-based approach to inequality decomposition and application to India
The paper revisits the regression-based inequality decomposition based on Shorrocks and Fields, derives further theoretical results on the factor shares and applies them in an empirical setting. First we derive the asymptotic distribution of inequality factor share estimators for obtaining their standard deviations necessary for drawing inference. Then we generalise the approach to derive shares for a frequently used welfare-based inequality index that does not belong to the same category as those used in the earlier studies, namely the Atkinson's Index. Finally we use our theoretical results to examine the major factors that contribute to income inequality in India. Our results show that education and household size are the two most dominant factors contributing to income inequality in both rural and urban areas, followed by employment status and regional differences.
|Date of creation:||Jul 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +41 22 379 8263
Fax: +41 22 379 82 93
Web page: http://www.unige.ch/gsem/dsec/index.htmlEmail:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Levison, D. & Lam, D., 1990.
"Declining Inequality In Schooling In Brazil And Its Effects On Inequality In Earning,"
618, Yale - Economic Growth Center.
- Lam, David & Levison, Deborah, 1991. "Declining inequality in schooling in Brazil and its effects on inequality in earnings," Journal of Development Economics, Elsevier, vol. 37(1-2), pages 199-225, November.
- Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, vol. 52(6), pages 1369-85, November.
- Pyatt, Graham & Chen, Chau-nan & Fei, John, 1980. "The Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 451-73, November.
- Jonathan Morduch & Terry Sicular, 2002.
"Rethinking Inequality Decomposition, With Evidence from Rural China,"
Royal Economic Society, vol. 112(476), pages 93-106, January.
- Jonathan Morduch & Terry Sicular, 1998. "Rethinking Inequality Decomposition, with Evidence from Rural China," Harvard Institute of Economic Research Working Papers 1831, Harvard - Institute of Economic Research.
- Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
- Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
- Fei, John C H & Rainis, Gustav & Kuo, Shirley W Y, 1978. "Growth and the Family Distribution of Income by Factor Components," The Quarterly Journal of Economics, MIT Press, vol. 92(1), pages 17-53, February.
- Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
- Cowell, Frank A, 1980. "On the Structure of Additive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 47(3), pages 521-31, April.
- Almeida dos Reis, Jose Guilherme & Paes de Barros, Ricardo, 1991. "Wage inequality and the distribution of education : A study of the evolution of regional differences in inequality in metropolitan Brazil," Journal of Development Economics, Elsevier, vol. 36(1), pages 117-143, July.
- Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281.
- Cowell, Frank A & Jenkins, Stephen P, 1995. "How Much Inequality Can We Explain? A Methodology and an Application to the United States," Economic Journal, Royal Economic Society, vol. 105(429), pages 421-30, March.
When requesting a correction, please mention this item's handle: RePEc:gen:geneem:12072. 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: ()
If references are entirely missing, you can add them using this form.