Abstract
The purpose of this research is to introduce a new approach to the decomposition of the Gini ratio into three components, supporting them with economic and statistical rigorous interpretations. The three components are: (i) the Gini inequalitywithin subpopulations; (ii) thenet contribution of the extended Gini inequalitybetween subpopulations; and (iii) the contribution of theintensity of transvariation between subpopulations. These components are weighted by the product of the population shares times the income shares of the corresponding subpopulations where the weights add to one.
The decomposition introduced in this research is applied to the 1990 U.S. family income distribution. The population of families is disaggregated by types into the following subpopulations: (a) married-couple families; (b) male householder, no wife present; and (c) female householder, no husband present.
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Dagum, C. A new approach to the decomposition of the Gini income inequality ratio. Empirical Economics 22, 515–531 (1997). https://doi.org/10.1007/BF01205777
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DOI: https://doi.org/10.1007/BF01205777
Key Words
- Relative economic affluence
- Extended Gini ratio between income distributions
- Intensity of transvariation
- Gini mean difference between income distributions