A subgroup decomposition of the inequality change over time

Abstract

This article proposes a subgroup decomposition of the determinants of the change in the Gini index over time. The decomposition allows one to explain the link between inequality change, reranking and income growth for the various subgroup components of the inequality index.

Decomposing changes in CO 2 emission inequality over time: The roles of re-ranking and changes in per capita CO 2 emission disparities

“…Similar distributional aspects were explored by Jenkins and Van Kerm in their decomposition of the change in income inequality over time (Jenkins and Van Kerm, 2006). Mussini expressed the Jenkins and Van Kerm decomposition in a matrix form which is subgroup decomposable (Mussini, 2013b). Based on the approach in Mussini (2013b), we show that E can be decomposed into two components measuring the effects on ΔG attributable to re-ranking and change in relative emission disparities between per capita emitters by keeping their ranking in t fixed.…”

The sensitivity of the Gini to changes in group sizes and mean incomes: an extension of ANOGI applied to Brazil

“…One dimension that has not been explored, however, is a measurement of how total inequality and its components react to changes in the sizes of the subpopulations. If there is access to panel data, it might be possible to directly study the mobility of individuals between groups, such as in Yitzhaki and Wodon (2004) or in some multi-decompositions following Dagum's tradition (Mussard & Savard, 2012; Mussini, 2013b, c). If such data are not available – an all-too-common feature – or if mobility is impossible (e.g.…”

“…4. For recent developments of this approach, see the multi-decompositions in Mussard and Savard (2012) and Mussini (2013a), as well as Mussini (2013b, c), who offers a version specific to longitudinal data.…”

“…With a growing number of works advancing proposals for decompositions of the Gini index (e.g. Dagum, 1997;Mornet et al, 2013;Mussard & Savard, 2012;Mussini, 2013c;Okamoto, 2009;Yitzhaki, 1994), it is now a long way since it could be said that the "interaction term" in group-wise decompositions "is impossible to interpret with any precision, except to say that it is the residual necessary to maintain the identity" (Mookherjee & Shorrocks, 1982, p. 889). It is reasonable to suppose that this research agenda has expanded for two reasons.…”