Based on the inequality decomposition of regression equation, we found that the regional original industry specialization was the most important factor of regional industry specialization difference, followed by market potential, wage level, total factor productivity, capital. Socioeconomic inequalities in adult obesity prevalence in. A simple procedure is developed for rectifying these pitfalls. Using linear regression at this step generates a heterogeneous set of regression coefficients that we use in a regression based decomposition of total inequality in the biomarkers. The econometrics of inequality and poverty lecture 10. Decomposition analyses for the uk, 197186 by stephen p. Regressionbased inequality decomposition, following. A quantile regression decomposition of urbanrural inequality. Regression based inequality decomposition 09 sep 2017, 04. Dear statalisters i am running a regression based decomposition by using command rbdineq. A quantile regression decomposition of urbanrural inequality in vietnam binh t.
The regressionbased inequality decomposition will be employed in this study. Regressionbased decomposition using household data a considerable literature exists on the measurement of income inequality in china and its increasing trend. This study analyses the urban rural inequality in sri lanka, using household consumption expenditure as a proxy measure of household welfare by applying a quantile regression decomposition technique. Decomposition of gini and the generalized entropy inequality.
The decomposition based regression analysis finds that household size is responsible for the maximum share of inequality in the total inequality of the average mpce and predicted mpce in the both urban and rural areas in 200405 and 201112. For example, continuous variables are permissible, and it is possible to control for endogeneity. Kessels marcel bluhm the wang yannan institute for studies in economics, xiamen university and center for financial studies, goethe university frankfurt xiamen, 19 october 20. This paper explores pitfalls in regression based inequality decompositions. In this article we provide an overview of the gini decomposition and the generalized entropy inequality measures, a free access to their computation, an application on french wages, and a different way than dagum to demonstrate that the gini index is a more convenient measure. The study 30 combine the regression based decomposition technique and the shapley value framework developed 26 in analysing income inequality in rural china between 1996 and 2002. Multilevel linear regression was used to model the number of additional living children a woman has after her first two living children. The use of regression based decomposition is novel in that it allows ranking of these determinants according to any inequality measure. This paper applies the regression based inequality decomposition approach to explore determinants of income inequality in cameroon using the 2007 cameroon household consumption survey.
Variance function regressions for studying inequality the harvard community has made this article openly available. Much less is known about the driving forces of this trend and their quantitative contributions. Income inequality among korean farm households eaae 2014. The study employs an unconditional quantile regression and recently proposed decomposition technique based on recentred influence functions. Different methods of decomposing changes in poverty into growth. The impacts of financial development, urbanization, and. Secondly, unconditional quantile regression is used to examine the effects of age on different points of the wealth distribution. Regressionbased approaches to inequality decomposition are appealing because they overcome many of the limitations of standard decomposition by groups.
The results show that education, wealth, and the employment sector are significant contributors to income inequality in indonesia. This study investigates the pathways of urban health inequalities using inequality decomposition analyses. 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. To deal with the omitted variable problem, we propose an instrumental variable quantile regression based decomposition method. We adopt a regression based inequality decomposition method fiorio and jenkins, 2010. This paper explores pitfalls in regressionbased inequality decompositions. Let us consider the decomposition of a population between rural and urban. Once combined with conventional decomposition methods or the shapley value approach of shorrocks 1999, what. What lies behind rising earnings inequality in urban china.
Variance function regressions for studying inequality. Regressionbased inequality decomposition, following fields 2003. The formulae used are those proposed by fields 2003 which, in turn, are closely related to those proposed by shorrocks 1982 for nonregressionbased decomposition of inequality by income source. Why is inequality in south africa higher than in germany. Is it possible to use regression based inequality decomposition userwritten command ineqrbd where dependent variable i. Formerly project director at unuwider, he has taught and researched in development economics an applied econometrics at a range of universities including the university of new england and the university of sydney and he is an honorary professor at. China statistical yearbooks and china agricultural yearbooks nbs, various. To date, however, work on regression based methods of inequality has. An unconditional quantile regression based decomposition. This paper applies the regressionbased inequality decomposition approach to explore determinants of income inequality in cameroon using the 2007 cameroon household consumption survey. Compared with the classical methodologies, the regression based method gives the. Results reveal that the age effect is heterogeneous across the distribution. If it takes too long to load the home page, tap on the button below.
Pathways of economic inequalities in maternal and child. Eight explanations for uk income inequality trends between 1971 and 1986 are assessed by pooling evidence from inequality index decompositions by population subgroup and by. Regressionbased inequality decomposition following fields. We find significant spatial differences in consumption expenditure across selected quantiles, with ruralurban inequalities driven largely by differences in returns to households endowments. Your story matters citation western, bruce and deirdre bloome. Further results on the regressionbased approach to.
Regression based approaches to inequality decomposition are appealing because they overcome many of the limitations of standard decomposition by groups. For years, economists have attempted to develop the regressionbased approach to inequality decomposition. Survey based linear regressions are fitted and used to generate contributions of regressedsources to measured income inequality. This talk discusses ineqrbd, a program for ols regression based decomposition suggested by g. Jenkins, iser, university of essex uksug 10 september 2007 c. Based on the inequality decomposition of regression equation, we found that the regional original industry specialization was the most important factor of regional industry specialization difference, followed by market potential, wage level, total factor productivity, capital shock, opening degree, reform progress and transport infrastructure. Morduch and sicular 2002 have suggested a specic regressionbased method for decomposing inequality.
Regression based decomposition approaches decompositions of inequality indices by population groups and by income sources are commonly applied in the field of income distribution. A shapleybased decomposition of the rsquare of a linear regression israeli, osnat 20061115 00. The contribution of each source to measured income inequality is. Decomposition of income inequality into multiple characteristics. Analysis of regional industrial specialization difference in. Regression based inequality decomposition statalist. The approach employed is regression based inequality decomposition using the shapley value decomposition framework. Pdf this talk discusses ineqrbd, a program for ols regressionbased decomposition suggested by g. Regressionbased decompositions start with the estimation of an incomegenerating function, and then use the estimated coefficients to derive the inequality weight of every explanatory variable. The study 30 combine the regressionbased decomposition technique and the shapley value framework developed 26 in analysing income inequality in rural china between 1996 and 2002. Noting that the approach based on shorrocks and fields is not directly applicable to an important welfarebased inequality index, namely atkinsons inequality index, we generalise it to derive shares for this index. Regressionbased approaches for the decomposition of income. Compared with the classical methodologies, the regressionbased method gives the.
Inequality decomposition by regressedincome sources in cameroon. Application of a twopart and regression based inequality decomposition. The second method is regressionbased inequality decomposition, which allows the quantification of the contributions of various factors, which affect household income, to. To deal with the omitted variable problem, we propose an instrumental variable quantile regressionbased decomposition method. The secondary analysis was based on the 2014 egypt demographic and health survey. Regressionbased decomposition approaches decompositions of inequality indices by population groups and by income sources are commonly applied in the field of income distribution. Gizachew mengesha, determinant of income inequality in ethiopia.
Pioneers in this area include oaxaca 1973 and blinder 1973. Wan and zhou, 2005 to separate each variables contribution. Working paper, department of sociology, harvard university. Inequality decomposition by regressedincome sources in. Surveybased linear regressions are fitted and used to generate contributions of regressedsources to measured income inequality. Using linear regression at this step generates a heterogeneous set of regression coefficients that we use in a regressionbased decomposition of total inequality in the biomarkers. Finally, the regressionbased decomposition approach allows us to. Regressionbased approaches for the decomposition of income inequality in italy, 19982008 rosalba manna 1, andrea regoli 2 abstract decompositions by population subgroups and by income sources represent the traditional techniques for decomposing income inequality. The contribution of each source to measured income inequality is the sum of its weighted marginal contributions in all possible configurations of sources as. It also introduces modelbased decomposition of inequality over. Regressionbased inequality decomposition, following fields 2003 carlo v. Regression based decomposition using household data a considerable literature exists on the measurement of income inequality in china and its increasing trend.
This talk discusses ineqrbd, a program for ols regressionbased decomposition suggested by g. More details regarding the various methods we use are provided in. Statistical software components s456960, boston college department of economics. Fields accounting for income inequality and its change. The most common approach implies decomposing total inequality into the contribution of. The leading decomposition method applied to i is the wdw decomposition method based on a linear regression of health. The use of regressionbased decomposition is novel in that it allows ranking of these determinants according to any inequality measure. A new method, with application to the distribution of earnings in the united states, research in labor economics, 2003.
The regression based inequality decomposition will be employed in this study. Jenkins university college of swansea final version received 11 november 1993. In order to decompose the source of income inequality, the shapley value decomposition framework proposed by shorrocks 1999 and the method employed by. Regressionbased inequality decomposition unuwider united. Pdf regressionbased inequality decomposition researchgate. A regressionbased decomposition of wealth related inequality in obesity was also performed, showing that while the main contributor is socioeconomic status measured by asset index for both men and women. Regression based inequality decomposition, following fields 2003 carlo v. Regression based approaches for the decomposition of income inequality in italy, 19982008 rosalba manna 1, andrea regoli 2 abstract decompositions by population subgroups and by income sources represent the traditional techniques for decomposing income inequality. The approach employed is regressionbased inequality decomposition using the shapley value decomposition framework. A general method for decomposing the causes of socioeconomic. Decomposing the rich dad effect on income inequality using. Daniel westbrook department of economics, georgetown university economics and research department, asian development bank march 2006 abstract. The paper revisits regressionbased inequality decomposition, derives further theoretical results on the factor shares and applies them in an empirical setting. Our empirical analysis using chns data finds that the composition effect explains at least 80% of the income difference at any quantile, and it explains all the income difference at the top four deciles.
We develop a general method for decomposing socioeconomic inequality in health. Moreover, household level data are used in this chapter, complementing the existing literature, which is mostly based on aggregate data. The procedure does not impose any restrictions on the underlying regression model and it can be applied to any inequality measures. Diversification into nonfarm activities in ethiopia. Source of inequality in consumption expenditure in india. To date, however, work on regressionbased methods of inequality has. The proposed methodology combines the socalled shapley approach chantreuil and trannoy, inequality. Widening inequality has significant implications for growth and macroeconomic stability.
I need to implement heckman model with inequality decomposition. He is principal economist at the asian development bank. Regressionbased approaches for the decomposition of. It also introduces model based decomposition of inequality over time using quantile regression. Regression based decompositions start with the estimation of an incomegenerating function, and then use the estimated coefficients to derive the inequality weight of every explanatory variable. Regressionbased decomposition of inequality in dineq. Unconditional quantile regressionbased decomposition method.