How Much Inequality Can We Explain? A Methodology and an Application to the Usa (Now Published in the Economic Journal, Vol.105, No.429 (March 1995), Pp. 421-430)
Posted: 21 Feb 2008
Date Written: May 1994
We develop two simple measures of how much inequality is explained by individual population characteristics or groups of characteristics, analogous to R2 in regression analysis. We investigate the measures&apos' empirical implementation using several alternative theoretically consistent approaches to inequality decomposition. Results are illustrated using US PSID income data.
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