IDEAS home Printed from https://ideas.repec.org/p/lis/liswps/209.html
   My bibliography  Save this paper

Income Inequality Decomposition by Income Source and by Population Subgroups: A Theoretical Overview and the Empirical Case of Denmark

Author

Listed:
  • Jesper Drescher

Abstract

Analyses of income inequality are often applied to the case of measuring total income inequality in a given population, but often it is more interesting to make research into how income inequality can be related to income differences between population subgroups or how income inequality can be related to the distribution of different income sources. The first category includes the cases, where total inequality can be expressed as the sum of a within-group inequality term and a between-group term, where the within-group contribution is itself a weighted sum of the sub-group inequality values. The second category includes the cases, where the contributions of separate income sources to total income inequality are examined. Furthermore combinations of the two categories can be done. Many empirical studies have decomposed total income inequality by population subgroups or by income source, without being critical of which inequality measures that are able to be used -satisfactorily - in a decomposition. Therefore we begin in section 2 with a number of general principles that we might wish to be satisfied by any decomposition by population subgroups. Section 3 proposes some general principles that we might prefer to be satisfied by any decomposition by income sources. Section 4 gives a short overview of the data used in the following empirical studies. The empirical results of this paper are calculated on the basis of Luxembourg Income Study (LIS). Section 5 and section 6 present the empirical work of this paper. Finally section 7 summarizes the main findings of this study.

Suggested Citation

  • Jesper Drescher, 1999. "Income Inequality Decomposition by Income Source and by Population Subgroups: A Theoretical Overview and the Empirical Case of Denmark," LIS Working papers 209, LIS Cross-National Data Center in Luxembourg.
  • Handle: RePEc:lis:liswps:209
    as

    Download full text from publisher

    File URL: http://www.lisdatacenter.org/wps/liswps/209.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. Yves Flückiger & Jacques Silber, 1995. "Income Inequality Decomposition by Income Source and the Breakdown of Inequality Differences Between Two Population Subgroups," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 131(IV), pages 599-615, December.
    3. Paolo Figini, 1998. "Inequality Measures, Equivalence Scales and Adjustment for Household Size and Composition," Economics Technical Papers 988, Trinity College Dublin, Department of Economics.
    4. Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, vol. 52(6), pages 1369-1385, November.
    5. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-255, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cecilia García-Peñalosa & Elsa Orgiazzi, 2013. "Factor Components of Inequality: A Cross-Country Study," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59(4), pages 689-727, December.
    2. Michele Giammatteo, 2006. "Inequality in Transition Countries: The Contributions of Markets and Government Taxes and Transfers," LIS Working papers 443, LIS Cross-National Data Center in Luxembourg.
    3. Cecilia Garcia Peñalosa & Orgiazzi, E., 2011. "GINI DP 12: Factor Components of Inequality. A Cross-Country Study," GINI Discussion Papers 12, AIAS, Amsterdam Institute for Advanced Labour Studies.
    4. Cecilia Garc a-Pe alosa & Richard Breen & Elsa Orgiazzi, 2008. "Factor Components of Inequality: Cross-Country Differences and Time Changes," LIS Working papers 503, LIS Cross-National Data Center in Luxembourg.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mussard, Stéphane & Pi Alperin, Maria Noel, 2011. "Poverty growth in Scandinavian countries: A Sen multi-decomposition," Economic Modelling, Elsevier, vol. 28(6), pages 2842-2853.
    2. Leonardo Bonilla Mejía, 2011. "Diferencias regionales en la distribución del ingreso en Colombia," Revista Sociedad y Economía, Universidad del Valle, CIDSE, December.
    3. Stéphane Mussard & Michel Terraza, 2009. "Décompositions des mesures d'inégalité : le cas des coefficients de Gini et d'entropie," Recherches économiques de Louvain, De Boeck Université, vol. 75(2), pages 151-181.
    4. Stéphane Mussard & Françoise Seyte & Michel Terraza, 2006. "La décomposition de l’indicateur de Gini en sous-groupes : une revue de la littérature," Cahiers de recherche 06-11, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    5. Anthony Shorrocks, 2013. "Decomposition procedures for distributional analysis: a unified framework based on the Shapley value," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 99-126, March.
    6. Johannes Schwarze, 1993. "Ein Ansatz zur empirischen Analyse der gesamtdeutschen Einkommensverteilung," Discussion Papers of DIW Berlin 78, DIW Berlin, German Institute for Economic Research.
    7. Stefananescu, Stefan, 2008. "Measuring the Socio-Economic Bipolarization Phenomenon," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 5(1), pages 149-161, March.
    8. I. Josa & A. Aguado, 2020. "Measuring Unidimensional Inequality: Practical Framework for the Choice of an Appropriate Measure," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 541-570, June.
    9. Elbers, Chris & Lanjouw, Peter & Mistiaen, Johan A. & Ozler, Berk, 2005. "Re-interpreting sub-group inequality decompositions," Policy Research Working Paper Series 3687, The World Bank.
    10. Alonso-Villar, Olga & del Río, Coral, 2010. "Local versus overall segregation measures," Mathematical Social Sciences, Elsevier, vol. 60(1), pages 30-38, July.
    11. Tomoki Fujii, 2013. "Geographic decomposition of inequality in health and wealth: evidence from Cambodia," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(3), pages 373-392, September.
    12. Andonie, Costel & Kuzmics, Christoph & Rogers, Brian W., 2019. "Efficiency-based measures of inequality," Journal of Mathematical Economics, Elsevier, vol. 85(C), pages 60-69.
    13. Casilda Lasso de la Vega & Ana Urrutia & Oscar Volij, 2011. "An Axiomatic Characterization Of The Theil Inequality Order," Working Papers 1103, Ben-Gurion University of the Negev, Department of Economics.
    14. Tugce, Cuhadaroglu, 2013. "My Group Beats Your Group: Evaluating Non-Income Inequalities," SIRE Discussion Papers 2013-49, Scottish Institute for Research in Economics (SIRE).
    15. Luc Savard & Stéphane Mussard, 2005. "Micro-simulation and Multi-decomposition: A Case Study: Philippines," Cahiers de recherche 05-02, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    16. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years Of Regional Inequality In China: A Journey Through Revolution, Reform And Openness," Working Papers 7236, Cornell University, Department of Applied Economics and Management.
    17. Teixidó Figueras, Jordi & Duro Moreno, Juan Antonio, 2012. "Ecological Footprint Inequality: A methodological review and some results," Working Papers 2072/203168, Universitat Rovira i Virgili, Department of Economics.
    18. Frank A Cowell & Emmanuel Flachaire, 2018. "Inequality Measurement and the Rich: Why inequality increased more than we thought," STICERD - Public Economics Programme Discussion Papers 36, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    19. Lucia Quadrado & Henk Folmer & Sudha Loman, 2001. "Regional Inequality in the Provision of Health Care in Spain," Environment and Planning A, , vol. 33(5), pages 783-798, May.
    20. Anton I. Votinov & Samvel S. Lazaryan & Vyacheslav N. Ovchinnikov, 2019. "Regression-Based Decomposition of Income Inequality Factors in Russia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 74-89, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lis:liswps:209. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Piotr Paradowski (email available below). General contact details of provider: https://edirc.repec.org/data/lisprlu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.