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Inequality decompositions—a reconciliation

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Abstract

We show how classic source-decomposition and subgroup-decomposition methods can be reconciled with regression methodology used in the recent literature. We also highlight some pitfalls that arise from uncritical use of the regression approach. The LIS database is used to compare the approaches using an analysis of the changing contributions to inequality in the United States and Finland.

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Authors and Affiliations

  1. STICERD, London School of Economics, Houghton Street, London, WC2A 2AE, UK

    Frank A. Cowell

  2. DEAS and Econpubblica, University of Milan, via Conservatorio, 7, 20133, Milan, Italy

    Carlo V. Fiorio

Authors
  1. Frank A. Cowell
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  2. Carlo V. Fiorio
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Correspondence to Frank A. Cowell.

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Cowell, F.A., Fiorio, C.V. Inequality decompositions—a reconciliation. J Econ Inequal 9, 509–528 (2011). https://doi.org/10.1007/s10888-011-9176-1

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  • DOI: https://doi.org/10.1007/s10888-011-9176-1

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