## Decomposition of rank-dependent measures of inequality by subgroups

##### Journal article, Peer reviewed

##### Permanent lenke

http://hdl.handle.net/11250/177686##### Utgivelsesdato

2005##### Metadata

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##### Originalversjon

Metron, Vol. LXIII, no. 3 (2005), pp. 493-503##### Sammendrag

Summary - The purpose of additive subgroup decomposition is to study the relationship
between overall inequality and inequality within and between population
subgroups defined by variables like gender, age, education and region of residence.
As opposed to the inequality measures that are additively decomposable, the so-called
generalized entropy family of inequality measures, the Gini coefficient does not admit
decomposition into within- and between-group components but does also require an
interaction (overlapping) term. The purpose of this paper is to introduce an alternative
decomposition method that can be considered to be a parallel to Lerman and
Yitzhaki’s (1985) elasticity approach for decomposing the Gini coefficient by income
sources, which means that the elasticity of the Gini coefficient with respect to various
income components is treated as the basic quantities of the decomposition method.
Thus, rather than decomposing the Gini coefficient or any other inequality measure
into a within-inequality term, a between-inequality term and eventually an interaction
term, the basic quantities of the introduced method are the effects of marginal changes
in variables that are used to specify the population subgroups.
Key Words - The Gini coefficient; The Bonferroni coefficient; Rank-dependent measures
of inequality; Decomposition by subgroups.