Re-Interpreting Sub-Group Inequality Decompositions

The authors propose a modification to the conventional approach of decomposing income inequality by population sub-groups. Specifically, they propose a measure that evaluates observed between-group inequality against a benchmark of maximum between-group inequality that can be attained when the numbe...

Full description

Bibliographic Details
Main Authors:	Elbers, Chris, Lanjouw, Peter, Mistiaen, Johan A., Özler, Berk
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AVERAGE INCOME AVERAGE INCOMES BETWEEN-GROUP INEQUALITY CENTRAL ASIAN COUNTERFACTUAL DECOMPOSABLE INCOME INEQUALITY MEASURES DECOMPOSABLE INEQUALITY MEASURES DECOMPOSITION ANALYSIS DECOMPOSITION RESULTS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING WORLD DIFFERENCES IN INCOME EARNINGS INEQUALITY ECONOMETRICS ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC POLICIES ECONOMIC POLICY ECONOMIC REVIEW ECONOMIC STUDIES ECONOMIC THEORY EMPIRICAL WORK GINI COEFFICIENT GROUP INEQUALITIES GROUP INEQUALITY GROUP MEANS HIGH INEQUALITY HIGH INEQUALITY COUNTRIES HOUSEHOLD SURVEYS INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME INEQUALITY INCOMES INEQUALITY AVERSION INEQUALITY DECOMPOSITION INEQUALITY DECREASE INEQUALITY MEASURE INEQUALITY MEASUREMENT INEQUALITY MEASURES LATIN AMERICAN MEAN DIFFERENCES MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MEASURED INEQUALITY MEASUREMENT ERROR MEASURING INEQUALITY NEGATIVE RELATIONSHIP 0 HYPOTHESIS PER CAPITA CONSUMPTION PER CAPITA INCOME PER CAPITA INCOME LEVEL PER CAPITA INCOMES POLICY IMPLICATIONS POLICY RESEARCH POOR POPULATION SHARE POPULATION SUB-GROUPS POSITIVE CORRELATION POSITIVE RELATIONSHIP POVERTY LINES POVERTY MEASUREMENT POVERTY REDUCTION REGRESSION RESULTS RESIDUAL TERM SAM SOCIAL GROUPS STATISTICAL METHODS WELFARE INDICATORS WELLBEING
Online Access:	http://documents.worldbank.org/curated/en/2005/08/6236958/re-interpreting-sub-group-inequality-decompositions http://hdl.handle.net/10986/8604

Description
Summary:	The authors propose a modification to the conventional approach of decomposing income inequality by population sub-groups. Specifically, they propose a measure that evaluates observed between-group inequality against a benchmark of maximum between-group inequality that can be attained when the number and relative sizes of groups under examination are fixed. The authors argue that such a modification can provide a complementary perspective on the question of whether a particular population breakdown is salient to an assessment of inequality in a country. As their measure normalizes between-group inequality by the number and relative sizes of groups, it is also less subject to problems of comparability across different settings. The authors show that for a large set of countries their assessment of the importance of group differences typically increases substantially on the basis of this approach. The ranking of countries (or different population groups) can also differ from that obtained using traditional decomposition methods. Finally, they observe an interesting pattern of higher levels of overall inequality in countries where their measure finds higher between-group contributions.

Re-Interpreting Sub-Group Inequality Decompositions

Similar Items