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A Unified Structural Equation Modelling Approach for the Decomposition of Rank-Dependent Indicators of Socioeconomic Inequality of Health

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  • Kessels Roselinde
  • Erreygers Guido

Abstract

We present a unified structural equation modelling framework for the regression-based decomposition of rank-dependent indicators of socioeconomic inequality of health and compare it with a simple ordinary least squares regression. The structural equation modelling framework forms the basis for a proper use of the most prominent one- and two-dimensional decompositions and provides an argument for using the bivariate multiple regression model for two-dimensional decomposition. Within the structural equation modelling framework, the two-dimensional decomposition integrates the feedback mechanism between health and socioeconomic status and allows for different sets of determinants of these variables. We illustrate the structural equation modelling approach and its outperformance of ordinary least squares using data from the 2011 Ethiopian Demographic and Health Survey.

Suggested Citation

  • Kessels Roselinde & Erreygers Guido, 2015. "A Unified Structural Equation Modelling Approach for the Decomposition of Rank-Dependent Indicators of Socioeconomic Inequality of Health," WIDER Working Paper Series 017, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2015-017
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    References listed on IDEAS

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    1. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    2. Van Ourti, Tom & van Doorslaer, Eddy & Koolman, Xander, 2009. "The effect of income growth and inequality on health inequality: Theory and empirical evidence from the European Panel," Journal of Health Economics, Elsevier, vol. 28(3), pages 525-539, May.
    3. Wagstaff, Adam & van Doorslaer, Eddy & Watanabe, Naoko, 2003. "On decomposing the causes of health sector inequalities with an application to malnutrition inequalities in Vietnam," Journal of Econometrics, Elsevier, vol. 112(1), pages 207-223, January.
    4. White, Halbert, 1982. "Instrumental Variables Regression with Independent Observations," Econometrica, Econometric Society, vol. 50(2), pages 483-499, March.
    5. Adam Wagstaff, 2005. "The bounds of the concentration index when the variable of interest is binary, with an application to immunization inequality," Health Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 429-432.
    6. Allanson, Paul & Gerdtham, Ulf-G. & Petrie, Dennis, 2010. "Longitudinal analysis of income-related health inequality," Journal of Health Economics, Elsevier, vol. 29(1), pages 78-86, January.
    7. Erreygers, Guido & Van Ourti, Tom, 2011. "Measuring socioeconomic inequality in health, health care and health financing by means of rank-dependent indices: A recipe for good practice," Journal of Health Economics, Elsevier, vol. 30(4), pages 685-694, July.
    8. Allanson, Paul & Petrie, Dennis, 2013. "Longitudinal methods to investigate the role of health determinants in the dynamics of income-related health inequality," Journal of Health Economics, Elsevier, vol. 32(5), pages 922-937.
    9. Erreygers, Guido, 2009. "Correcting the Concentration Index," Journal of Health Economics, Elsevier, vol. 28(2), pages 504-515, March.
    10. ERREYGERS, Guido & KESSELS, Roselinde, 2015. "Socioeconomic status and health: A new approach to the measurement of bivariate inequality," Working Papers 2015017, University of Antwerp, Faculty of Applied Economics.
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    Cited by:

    1. Guido Erreygers & Roselinde Kessels & Linkun Chen & Philip Clarke, 2016. "Decomposing Socioeconomic Inequality of Health," EcoMod2016 9574, EcoMod.
    2. Heckley, Gawain & Gerdtham, Ulf-G. & Kjellsson, Gustav, 2016. "A general method for decomposing the causes of socioeconomic inequality in health," Journal of Health Economics, Elsevier, vol. 48(C), pages 89-106.
    3. Christiansen, Terkel & Lauridsen, Jørgen T., 2016. "Dynamic Changes in Determinants of Inequalities in Health in Europe with Focus on Retired - with Particular Regard to Retired Danes," COHERE Working Paper 2016:8, University of Southern Denmark, COHERE - Centre of Health Economics Research.

    More about this item

    Keywords

    Children; Econometric models (Economic development); Equality and inequality; Health; Regression analysis;

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I00 - Health, Education, and Welfare - - General - - - General

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