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Cross-country inequalities in welfare and its decomposition by Sen factors: the virtues of the Theil index

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  • Juan Antonio Duro

Abstract

In this study a new decomposition of the Theil index is proposed using multiplicative factors, which improves on that suggested in Duro (2001), and that, in particular, makes it possible to obtain, in isolation, the role attributable to the elements of factorial correlation. The Theil index, as a referential index in analysis, seems more attractive to us than log variance (Ezcurra and Pascual, 2005) for a variety of reasons. The application of the said decomposition for the analysis of international inequalities in terms of welfare levels, taking the Sen's factors (Sen, 1974, 1976), demonstrates that the bulk of these are determined by disparities in income per capita as well as their recent decrease.

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  • Juan Antonio Duro, 2008. "Cross-country inequalities in welfare and its decomposition by Sen factors: the virtues of the Theil index," Applied Economics Letters, Taylor & Francis Journals, vol. 15(13), pages 1041-1045.
    • Handle: RePEc:taf:apeclt:v:15:y:2008:i:13:p:1041-1045
    DOI: 10.1080/13504850600993507
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    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. P. J. Dawson, 1997. "On testing Kuznets' economic growth hypothesis," Applied Economics Letters, Taylor & Francis Journals, vol. 4(7), pages 409-410.
    3. Laszlo Matyas & Laszlo Konya & Lachlan MaCquarie, 1998. "The Kuznets U-curve hypothesis: some panel data evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 5(11), pages 693-697.
    4. Juan Antonio Duro Moreno, 2001. "Cross-country inequalities in aggregate welfare: some evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 8(6), pages 403-406.
    5. Amartya Sen, 1976. "Real National Income," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 43(1), pages 19-39.
    6. Carola Grün & Stephan Klasen, 2003. "Growth, Inequality and Well-Being: Comparisons across Space and Time," Ibero America Institute for Econ. Research (IAI) Discussion Papers 094, Ibero-America Institute for Economic Research.
    7. Sen, Amartya, 1974. "Informational bases of alternative welfare approaches : Aggregation and income distribution," Journal of Public Economics, Elsevier, vol. 3(4), pages 387-403, November.
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    Cited by:

    1. Andrés Rodríguez-Pose & Vassilis Tselios, 2015. "Toward Inclusive Growth," International Regional Science Review, , vol. 38(1), pages 30-60, January.
    2. Alex Cobham & Lukas Schlögl & Andy Sumner, 2016. "Inequality and the Tails: the Palma Proposition and Ratio," Global Policy, London School of Economics and Political Science, vol. 7(1), pages 25-36, February.
    3. Alex Cobham & Andrew Sumner, 2013. "Is it all about the tails? The Palma measure of income inequality," Working Papers 308, ECINEQ, Society for the Study of Economic Inequality.
    4. Alex Cobham, Andy Sumner, 2013. "Is It All About the Tails? The Palma Measure of Income Inequality-Working Paper 343," Working Papers 343, Center for Global Development.
    5. Wu, Dengsheng & Yuan, Lili & Li, Ruoyun & Li, Jianping, 2018. "Decomposing inequality in research funding by university-institute sub-group: A three-stage nested Theil index," Journal of Informetrics, Elsevier, vol. 12(4), pages 1312-1326.
    6. Alex Cobham & Luke Schlogl & Andy Sumner, 2015. "Inequality and the Tails: The Palma Proposition and Ratio Revisited," Working Papers 143, United Nations, Department of Economics and Social Affairs.

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