Gini and the degree of overlapping between two distributions. In particular, it defines the concepts of within and between inequality and analyses how different inequality indexes perform with respect to this decomposition. Lets consider a distribution f defined by its cumulative distribution function fy. To measure the contributions to inequality from population subgroups, the gini coefficient is often decomposed into inequality within groups, inequality between groups and a residual term arising from the overlapping of income distributions from. 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. Decomposition of the gini index by sources of income. By decomposing this measure you can better understand the determinants of inequality. The gini coefficient is widely used to measure inequality in the distribution of income, wealth, expenditures, etc.
C dagum, corrado gini 18841965, in s n durlauf and l e blume eds. It is well known that the standard decomposition of the gini index g by population groups does not yield an exact partition into betweengroup and withingroup components, g b and g w respectively, unless the income ranges of the groups are nonoverlapping e. The first one deals with a poornonpoor decomposition within a subgroup multilevel framework. This adofile provides the gini coefficient for the whole population, for each subgroup specified in groupvar, and its pyatts 1976 decomposition in between, overlap and withingroup inequality. Groupvar is a categorical variable not string who determines the subgroups in which the population will be divided. Citeseerx document details isaac councill, lee giles, pradeep teregowda.
Consequence is that between and within group inequality doesnt add up to the total gini coefficient. Gini coefficients of income are calculated on market income as well as disposable income basis. Mahalanobis used the term gini s mean difference for determining regional disparities in income distribution, is attributed as the first attempt of gini decomposition dagum, 1997, p. Measuring and analyzing class inequality with the gini. Baum, a new stata command is available from the ssc archives. The regional disequilibrium problem mainly arises from the gap between the eastern and western regions, and the interindustry gap is primarily manifested between heavily polluted and lightly polluted industries. Mussard, stephane, francoise seyte, and michel terraza, 2003 decomposition of gini and the generalized entropy inequality measures. Analysis of the short term impact of the argentine social assistance program plan jefes y jefas on income inequality applying the dagum decomposition analysis of the gini. The role of the gini measure consists in describing the statistical dispersion and, therefore, one can consider it as a variability measure. I got my first decomposition book in the usa, all the other ones from amazon.
Industrial co 2 emissions efficiency and its determinants. Income inequality measures proposed by gini, zenga and bonferroni are calculated for different socioeconomic groups based on their exclusive. Different methods of decomposing changes in poverty into growth. The dagum distribution is a continuous probability distribution defined over positive real numbers. Analysis of the short term impact of the argentine social assistance program plan jefes y jefas on income inequality applying the dagum decomposition analysis of the gini ratio, 12. Introduction it is widely known that income inequality has risen dramatically over the past forty years. Gini coefficient for the dagum distribution in acid. Stata module to perform gini decomposition by income source, statistical software components s456001, boston college department of economics, revised 22 sep 2008. A note on the dagum decomposition of the gini inequality index. Proceedings of the second international conference on income distribution by size. Citeseerx on dagums decomposition of the gini coefficient. The dagum gini coefficient and its decomposition dagum 1997 proposed a decomposition method based on subsamples and proposed that the overall gini coefficient be decomposed into contributions by the intraregional differences, intraregional net differences, and intensity of transvariation. The betweengroup inequality concept computes all the differences in salaries between men and women.
In my function, fex 19968, ginicoeff requires two variables. Gini decomposition technique lopezfeldman, mora, and taylor 2007, adams 2001, mollers and buchenrieder 2011. Another useful primary is to outline the decomposition by factor components that has been proposed for the gini coefficient see fei et al. Summary this tool illustrates how to decompose inequality measures by subgroups of populations. Giammatteo the bidimensional decomposition of inequality. The new palgrave dictionary of economics online, 2nd ed. The dagum distribution arose from several variants of a new model on the size distribution of personal income and is. Section four provides an example of the gini decomposition by population subgroups using uk data and section ve concludes. The mean of that distribution is defined as using lebesguestiltjes integrals. Regional difference decomposition and policy implications. This section is devoted to the decomposition of the gini measure.
This is similar to calculating the gini coefficient for wage separately for each combination of team and year. She is best known for the alien series informally known as the katherine kitty katt series novels, published in the united states by daw books. The second modelisation exposes a mixture of decompositions, the socalled gini multi decomposition, which merges the subgroup decomposition with the income source decomposition section 4. Advances in econometrics, income distribution and scientific methodology. In this paper we reconsider the dagum decomposition of the gini index and we compare this decomposition with the decompositions proposed by mookherjee and shorrocks and by lambert and aronson. Furthermore, a dual relationship between utility and disutility functions. Im using stata to estimate gini coefficients for grouped data. I used them for college roughly 1,5 books for each semester. The population of families is disaggregated by types into the following subpopulations. The limitations of negative incomes in the gini coefficient. Inequality decomposition by factor components authors.
All you have to do is to figure out which of the billions packages available on cran ok. A convenient method of decomposing the gini index by population subgroups. The second modelisation exposes a mixture of decomposition, the so. Decomposes generalized entropy index of inequality by groups and provides standard errors on elements of the decompositions. Dagums decomposition and gini coefficient for subpopulations the gini decomposition method proposed by dagum in 1997 can be used to describe the sources of interregional disparity and the distribution of subsamples free from the influence of sample overlap. This paper has attempted to derive some implications from dagum s 1997 recent proposal for a new interpretation of the decomposition of the gini inequality index by population subgroups. In this paper, we present its decomposition by factor components with an application to income distributions in poland. You can do anything pretty easily with r, for instance, calculate concentration indexes such as the gini index or display the lorenz curve dedicated to my students although i did not explain it during my lectures, calculating a gini index or displaying the lorenz curve can be done very easily with r.
Pdf linking yitzhakis and dagums gini decompositions. The aim of this article is to propose a new breakdown of the gini inequality ratio into three components withingroup inequality, betweengroup inequality, and intensity of transvariation between groups to the total inequality index. Policy impacts on inequality decomposition of income inequality by subgroups 1 1. This note describes syntax, formulas and usage examples. Considering the dagum 1997 decomposition of the gini coefficient and the additional disaggregation of total income into its main components, he proposes a bidimensional.
Decomposition and interpretation of gini and the generalized entropy measures. Decomposition book grid paper composition book notebook. The decomposition is performed using the shapley value. Groupvar is a categorical variable not string who determines the. Economic development, household consumer expenditure.
C dagum, decomposition and interpretation of gini and the generalized entropy inequality measures, proceedings of the american statistical association, business and economic. F urthermore, the gini index of equality multi decomposition technique can appear as a more complete approach than the gini index of inequality multi decomposition. Decomposes the gini index or the absolute one by population subgroups. It is named after camilo dagum, who proposed it in a series of papers in the 1970s. A convenient method of decomposing the gini index by. Analyzing class inequality with modelbased clustering, section iv. Citations of a new approach to the decomposition of the gini. A development of this result shows that the decomposition can be expressed as involving three terms. In an attempt to preserve the integrity of the gini decomposition method, mussini 20, excludes negatives incomes to ensure normalization, while mussard and richard 2012 indicate that incomes must be. The decomposition of the gini coefficient by between and within group inequality. On the decomposition of gini coefficients by population class and income source. The second modelisation exposes a mixture of decompositions, the socalled gini multidecomposition, which merges the subgroup decomposition with the income source decomposition section 4.
This method allows you to compute overall income inequality and to break it down into withingroup and betweengroup income inequality. This function computes the gini coefficient for the dagum distribution. Decomposition of gini and the generalized entropy inequality. This command decomposes the gini coefficient by income source using the approach described in lerman and yitzhaki 1985 and in stark, taylor and yitzhaki 1986. The same problem exists with the multi decomposition of the gini index and the coe. Gini s mean difference is the arithmetic average of absolute differences of the all income pairs sen, 1997, p.
Afterwards, rao 1969 first proposed the two existing procedures to decompose an income inequality measure, that is. In the analysis, the decomposition of the gini coefficient by gender is applied to turkish individuals twice. A new approach to the decomposition of the gini income. Gini, the global innovation institute, is the worlds leading professional certification, accreditation, and membership association in the field of innovation. To measure the contributions to inequality from population subgroups, the gini coefficient is often decomposed into inequality within groups, inequality between groups and a residual term arising from the overlapping of income distributions from different groups. Poverty and inequality measurement present special. Generalized gini and concentration coe cients with factor decomposition in stata philippe van kerm cepsinstead, luxembourgz september 2009 revised february 2010 abstract sgini is a userwritten stata package to compute generalized gini and concentration coe cients. Gini decomposition on the basis of ginis mean difference index 1912 in order to study regional disparities. Income and wealth distribution, inequality and poverty. Advances on income inequality and concentration measures. In this paper we show that two decompositions presented separately in the literature, a traditional decomposition and a decomposition. On the interpretation and disaggregation of gini coefficients.
One of the aims of this paper is to propose a new gini multidecomposition which avoids this problem. The decomposition introduced in this research is applied to the 1990 u. I love every single design and the paper is just right for all he notes you need to take in daily life. Stan hurn on some implications of dagum s interpretation of the decomposition of the gini index by population subgroups joseph deutsch. On the shapley value and the decomposition of inequality by population subgroups with special emphasis on the gini index, 11. The second section illustrates this by decomposition of the gini coefficient in terms of conditional expectations of the value of the game.
Both the regional and industrial sectors dagum gini coefficients of industrial carbon efficiency exhibit the tendency of down first, and then up and stable on the whole. The main purpose of this research is to deduce and analyse a new decomposition of the gini index, and to present and analyse a decomposition of the generalized entropy inequality measure, deducing from the latter the particular cases corresponding to theil. In his 1912 book, corrado gini rst proposed a measure. At first, it drives the reader by sick curiousity to peer into this womans trunk, which is holding her exboyfriends corpse, and into her decomposing psyche. Camilo dagum, emeritus professor of the university of ottawa and doctor honoris causa of the university of montpellier i, introduced in 1997 the decomposition of the gini index by population subgroups. The cover, illustrated with a detailed topographical map, and the 160 gridruled pages inside are made from 100% postconsumer waste. Today i will show the use of a user written command descogini to decompose the gini by income source. In the madeup example below inspired by carlos post i use the userwritten ineqdeco command to calculate gini coefficients for price in the auto dataset, separate for each combination of foreigndomestic and reputation1 to 5. Chart your path to new insight with this earthcentric twist on the classic composition book. The shapley value is a solution concept often employed in the theory of cooperative games. Gini koch born jeanne marie gerrard on january 25, in california, is a science fiction, fantasy, and horror writer based in phoenix, arizona. The same problem exists with the multidecomposition of the gini index and the coe.
The evaluation of gender income inequality by means of the. It is based on the covariance formula of the gini index2. Indeed, as figure 1 shows, the commonly used gini coefficient measure of inequality is now at its highest level. Pdf decomposition of the gini coefficient using stata. In so doing, a deeper insight into the meaning of the overlapping term is given and an alternative expression for this term is obtained. A new decomposition method, dagum s approach for decomposition of the gini coefficient is used in the study.
The concentration curve, its dual and the gini measure. The gini concentration coefficient is considered to be the best synthetic inequality measure and is widely used in economic research. Then, rao 1969, mookherjee and shorroks 1982, silber 1989, lerman and yitzhaki 1991, dagum 1997a, 1997b and other authors contributed to the extension and qualification of the gini. Linking yitzhakis and dagums gini decompositions core. Articles on econometric methodology with special reference to the quantification of poverty and economic inequality are presented in this book. Both have useful features for decomposing inequality by income sources. Today i will show the use of a user written command descogini to decompose the gini. The income inequality measures iims proposed since pareto and gini and to derive their corresponding utility and disutility functions from the specification of a fundamental equation of income. The second one exhibits a multi decomposition technique, that is, the combination of the multilevel subgroup decomposition and the income source decomposition. In this article we show that the gini coefficient is simultaneously decomposable both by sources of income and by populations of income receivers for nonoverlapping income distributions.
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