Decomposition of Inequality Measures

Theory and Empirical Application
  • Friedrich Schmid
Conference paper


It is common practice to summarize income or wealth inequality in a population by computing statistical inequality measures like the Gini Coefficient or the Coefficient of Variation. This should be complemented, however, by an analysis of the structure of inequality and an attempt to identify its sources. For this purpose it may be useful to partition the basic population into subpopulations by some socio-economic characteristics (such as employment type, education etc.) and to decompose overall inequality into a part which is due to inequality “within” subgroups and a part which is due to inequality “between” subgroups. This approach was successfully applied to the analysis of income inequality in England, the U.S.A. and France by Mookherjee and Shorrocks (1982), Cowell (1984), and Bourguignon and Morrisson (1985), respectively.


Income Inequality Generalize Entropy Gini Coefficient Lorenz Curve Decomposition Analysis 
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Copyright information

© Springer-Verlag Berlin · Heidelberg 1994

Authors and Affiliations

  • Friedrich Schmid
    • 1
  1. 1.Seminar für Wirtschafts- und SozialstatistikUniversität zu KölnKöln 41Germany

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