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The Marginal Effects in Subgroup Decomposition of the Gini Index

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  • Ogwang Tomson

    (Brock University – Economics, 500 Glenridge Avenue St. Catharines Ontario L2S3A1, Canada.)

Abstract

In this article, we derive the elasticity of the Gini index with respect to changes in subgroup incomes for subgroups that are characterized by significant income separation. The resulting elasticity, which is structurally similar to that of the empirically popular Lerman and Yitzhaki’s (1985) elasticity for Gini income-source decomposition, entails easy and transparent computations. Some possible checks for income separation are described and an illustrative example using Canadian data is provided. The advantages of the proposed methodology over the Shapley value approach to Gini subgroup decomposition are stated.

Suggested Citation

  • Ogwang Tomson, 2016. "The Marginal Effects in Subgroup Decomposition of the Gini Index," Journal of Official Statistics, Sciendo, vol. 32(3), pages 733-745, September.
    • Handle: RePEc:vrs:offsta:v:32:y:2016:i:3:p:733-745:n:9
    DOI: 10.1515/jos-2016-0037
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    References listed on IDEAS

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