Inequality Decomposition Values

Frédéric Chantreuil and Alain Trannoy

Annals of Economics and Statistics, 2011, issue 101-102, 13-36

Abstract: This paper presents a general procedure inspired by the Shapley value for decomposing any inequality indices by factor components or by sub-populations. To do so we define an inequality game. Despite the fact that the characteristic function is not super-additive in general and that the linearity assumption of the space of inequality game does not hold, an axiomatization of the Shapley value is given in this context by using the Potential function pioneered by HART and MAS-COLELL [1989]. This result proves to be useful in illustrating a trade-off between the desirable properties of consistency and marginality. A comparison of such decomposition with the decomposition method investigated by SHORROCKS [1982] is provided in the case of factor component decomposition. Refinement of the Shapley decomposition is investigated when the set of income sources is nested. Furthermore, an application to the sub-population decomposition problem is also investigated.

Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://www.jstor.org/stable/41615472 (text/html)

Related works:
Working Paper: Inequality Decomposition Values (2011)
Working Paper: Inequality decomposition values (1997)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2011:i:101-102:p:13-36

Access Statistics for this article

Annals of Economics and Statistics is currently edited by Laurent Linnemer

More articles in Annals of Economics and Statistics from GENES Contact information at EDIRC.
Bibliographic data for series maintained by Secretariat General () and Laurent Linnemer ().