On the Decomposition of the Gini Coefficient: an Exact Approach, with an Illustration Using Cameroonian Data
Decomposing inequality indices across household groups or income sources is useful in estimating the contribution of each component to total inequality. This can help policy makers draw efficient policies to reduce disparities in the distribution of incomes using targeting tools. Decomposing relative inequality indices, such as the Gini coefficient, is not a simple procedure since, in many cases, the functional form of inequality indices is not additively separable in incomes. More importantly, for some of the indices on which this decomposition can be performed, the interpretation of the decomposition components is often not well founded. In this paper, we use the Shapley value as well as analytical approaches to perform the decomposition of the Gini coefficient and generalize it, in some cases, to the decomposition of other inequality indices. For the analytical approach, our aim is to extend the same interpretation, attributed to the Gini coefficient, to that of the contribution components.
|Date of creation:||2006|
|Date of revision:|
|Contact details of provider:|| Postal: CP 8888, succursale Centre-Ville, Montréal, QC H3C 3P8|
Phone: (514) 987-8161
Web page: http://www.cirpee.org/
More information through EDIRC
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.:
- Podder, Nripesh & Chatterjee, Srikanta, 2002. "Sharing the national cake in post reform New Zealand: income inequality trends in terms of income sources," Journal of Public Economics, Elsevier, vol. 86(1), pages 1-27, October.
- Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February.
- Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, vol. 52(6), pages 1369-85, November.
- Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
- Silber, Jacques, 1989. "Factor Components, Population Subgroups and the Computation of the Gini Index of Inequality," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 107-15, February.
- repec:ebl:ecbull:v:3:y:2003:i:19:p:1-16 is not listed on IDEAS
- John D. Hey & Peter J. Lambert, 1980. "Relative Deprivation and the Gini Coefficient: Comment," The Quarterly Journal of Economics, Oxford University Press, vol. 95(3), pages 567-573.
- Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June.
- Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-27, September.
When requesting a correction, please mention this item's handle: RePEc:lvl:lacicr:0602. 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: (Manuel Paradis)
If references are entirely missing, you can add them using this form.