Cowell, Frank A. and Fiorio, Carlo V. (2011) Inequality decompositions—a reconciliation. The Journal of Economic Inequality, 9 (4). pp. 509-528. ISSN 1569-1721
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.
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