<abstract xmlns="http://www.w3.org/1999/xhtml"><p>In this article, we derive the elasticity of the Gini index with respect to changes in subgroup incomes for subgroups that are characterized by significant income separation. The resulting elasticity, which is structurally similar to that of the empirically popular Lerman and Yitzhaki’s (1985) elasticity for Gini income-source decomposition, entails easy and transparent computations. Some possible checks for income separation are described and an illustrative example using Canadian data is provided. The advantages of the proposed methodology over the Shapley value approach to Gini subgroup decomposition are stated.</p></abstract>

In this article, we derive the elasticity of the Gini index with respect to changes in subgroup incomes for subgroups that are characterized by significant income separation. The resulting elasticity, which is structurally similar to that of the empirically popular Lerman and Yitzhaki’s (1985) elasticity for Gini income-source decomposition, entails easy and transparent computations. Some possible checks for income separation are described and an illustrative example using Canadian data is provided. The advantages of the proposed methodology over the Shapley value approach to Gini subgroup decomposition are stated.

The Marginal Effects in Subgroup Decomposition of the Gini Index

Journal of Official Statistics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

{"article-title":"The Marginal Effects in Subgroup Decomposition of the Gini Index"}

In this article, we derive the elasticity of the Gini index with respect to changes in subgroup incomes for subgroups that are characterized by significant...

The Marginal Effects in Subgroup Decomposition of the Gini Index

Published Online: Sep 23, 2016

Page range: 733 - 745

Received: Feb 01, 2015

Accepted: Sep 01, 2015

DOI: https://doi.org/10.1515/jos-2016-0037

Keywords
Subgroup decomposition, income separation, Gini index, elasticity, pseudo-Lorenz regression curve

© 2016 Tomson Ogwang, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The Marginal Effects in Subgroup Decomposition of the Gini Index

Published Online: Sep 23, 2016

Page range: 733 - 745

Received: Feb 01, 2015

Accepted: Sep 01, 2015

DOI: https://doi.org/10.1515/jos-2016-0037

KeywordsSubgroup decomposition, income separation, Gini index, elasticity, pseudo-Lorenz regression curve

© 2016 Tomson Ogwang, published by De Gruyter Open

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
Subgroup decomposition, income separation, Gini index, elasticity, pseudo-Lorenz regression curve