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Subgroup and Shapely Value Decompositions of Multidimensional Inequality: An Application to South East European Countries

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Listed:
  • Sebastian Leitner

    () (The Vienna Institute for International Economic Studies, wiiw)

  • Robert Stehrer

    () (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Inequality is a multidimensional phenomenon though it is often discussed along a single dimension like income. This is also the case for the various decomposition approaches of inequality indices. In this paper we study one- and multidimensional indices on inequality on data for three large South-East European countries, Bulgaria, Romania and Serbia. We include four dimensions in our measure of multidimensional inequality income, health, education and housing. We apply various decomposition methods to these one- and multidimensional indices. In doing so, we apply standard decomposition techniques of the mean logarithmic deviation index (I0) and decompositions based on regression analysis in conjunction with the Shapley value approach.

Suggested Citation

  • Sebastian Leitner & Robert Stehrer, 2011. "Subgroup and Shapely Value Decompositions of Multidimensional Inequality: An Application to South East European Countries," wiiw Balkan Observatory Working Papers 96, The Vienna Institute for International Economic Studies, wiiw.
  • Handle: RePEc:wii:bpaper:096
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    References listed on IDEAS

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    1. Ernesto Savaglio, 2006. "Multidimensional inequality with variable population size," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(1), pages 85-94, May.
    2. Jenkins, Stephen P, 1995. "Accounting for Inequality Trends: Decomposition Analyses for the UK, 1971-86," Economica, London School of Economics and Political Science, vol. 62(245), pages 29-63, February.
    3. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975.
    4. Maasoumi, Esfandiar, 1986. "The Measurement and Decomposition of Multi-dimensional Inequality," Econometrica, Econometric Society, vol. 54(4), pages 991-997, July.
    5. Patricia Justino, 2005. "Empirical Applications of Multidimensional Inequality Analysis," PRUS Working Papers 23, Poverty Research Unit at Sussex, University of Sussex.
    6. Sebastian Leitner & Robert Stehrer, 2009. "Determinants of Inequality in Selected SEE Countries: Results from Shapley Value Decompositions," wiiw Balkan Observatory Working Papers 84, The Vienna Institute for International Economic Studies, wiiw.
    7. Wan, Guanghua, 2004. "Accounting for income inequality in rural China: a regression-based approach," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 348-363, June.
    8. Osnat Israeli, 2007. "A Shapley-based decomposition of the R-Square of a linear regression," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(2), pages 199-212, August.
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    More about this item

    Keywords

    Multidimensional inequality; Inequality decomposition; Shapley value;

    JEL classification:

    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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