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Title:Regression-based inequality decomposition: Pitfalls and a solution procedure PDF Logo
Authors:Wan, Guang Hua
Issue Date:2002
Series/Report no.:WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2002/101
Abstract:This paper explores pitfalls in regression-based inequality decompositions. A simple procedure is developed for rectifying these pitfalls. The procedure does not impose any restrictions on the underlying regression model and it can be applied to any inequality measure(s). Once combined with conventional decomposition methods or the Shapley value approach of Shorrocks (1999), what is being proposed becomes a most general and powerful framework for regression-based inequality decomposition. Empirical examples are provided to demonstrate the use of the procedure, and to contrast our results with those based on recent developments of Fields and Yoo (2000) and Morduch and Sicular (2002).
Subjects:regression-based decomposition
income-generating function
Document Type:Working Paper
Appears in Collections:WIDER Discussion Papers, United Nations University (UNU)

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