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Multidimensional Decomposition of the Sen Index: Some Further Thoughts

  • Stéphane Mussard

    ()

    (GREDI, Université de Sherbrooke and GEREM, Université de Perpignan)

  • Kuan Xu

    ()

    (Department of Economics, Dalhousie University, Halifax, Canada)

Given the multiplicative decomposition of the Sen index into three commonly used poverty statistics – the poverty rate (poverty incidence), poverty gap ratio (poverty depth) and 1 plus the Gini index of poverty gap ratios of the poor (inequality of poverty) – the index becomes much easier to use and to interpret for economists, policy analysts and decision makers. Based on the recent findings on simultaneous subgroup and source decomposition of the Gini index, we examine possible further decompositions of the Sen index and its components for policy analysis.

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File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-0608.pdf
File Function: First version, 2006
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Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 06-08.

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Length: 20 pages
Date of creation: 2006
Date of revision:
Handle: RePEc:shr:wpaper:06-08
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  1. Chantreuil, F. & Trannoy, A., 1999. "Inequality Decomposition Values: the Trade-Off Between Marginality and Consistency," Papers 99-24, Paris X - Nanterre, U.F.R. de Sc. Ec. Gest. Maths Infor..
  2. 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.
  3. Foster, James E & Shorrocks, Anthony F, 1991. "Subgroup Consistent Poverty Indices," Econometrica, Econometric Society, vol. 59(3), pages 687-709, May.
  4. 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.
  5. Silber, Jacques, 1993. "Inequality Decomposition by Income," The Review of Economics and Statistics, MIT Press, vol. 75(3), pages 545-47, August.
  6. Yitzhaki, Shlomo & Lerman, Robert I, 1991. "Income Stratification and Income Inequality," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(3), pages 313-29, September.
  7. Stephane Mussard, 2004. "The bidimensional decomposition of the Gini ratio. A case study: Italy," Applied Economics Letters, Taylor & Francis Journals, vol. 11(8), pages 503-505.
  8. Dagum, Camilo, 1997. "A New Approach to the Decomposition of the Gini Income Inequality Ratio," Empirical Economics, Springer, vol. 22(4), pages 515-31.
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