Inequality Decomposition - A Reconciliation

37 Pages Posted: 13 May 2009

See all articles by Frank Cowell

Frank Cowell

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)

Carlo V. Fiorio

University of Milan - Dipartimento di Scienze Economiche, Aziendali e Statistiche

Date Written: April 2009

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.

JEL Classification: D63

Suggested Citation

Cowell, Frank A. and Fiorio, Carlo V., Inequality Decomposition - A Reconciliation (April 2009). LSE STICERD Research Paper No. DARP100. Available at SSRN: https://ssrn.com/abstract=1401774

Frank A. Cowell (Contact Author)

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 (0)171-955 7277 (Phone)
+44 (0)171-242 2357 (Fax)

Carlo V. Fiorio

University of Milan - Dipartimento di Scienze Economiche, Aziendali e Statistiche ( email )

via Conservatorio 7
Milano, 20122
Italy

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