Accounting for Regional Poverty Differences in Croatia: Exploring the Role of Disparities in Average Income and Inequality
No 1301, Working Papers from The Institute of Economics, Zagreb
The prevalence of poverty in a given population is determined by both the level of average income and the shape of income distribution. Accordingly, the difference in poverty between two populations can be attributed to disparities in their average incomes and in the levels of income inequality. In this paper, we decompose the differences in relative poverty between each of the twenty-one Croatian counties and Croatia as a whole into the contributions of the mean income and income inequality, using the Household Budget Survey data for 2010. The decomposition framework that we utilize here is one usually applied for decompositions of intertemporal poverty changes, and is based on the concept of Shapley value from cooperative game theory. Poverty is measured by three conventional measures – the headcount ratio, the poverty gap, and the squared poverty gap – and robustness of the results to switching from one measure to another is discussed. The results of decompositions show that in most cases both the mean income and inequality differences contribute to poverty variation across the counties, relative to poverty in Croatia as a whole. When poverty is measured by the headcount ratio, the income contribution dominates the inequality contribution, while when we switch to the other two measures, which give more weight to the poorer among the poor, the inequality contribution starts to dominate.
Keywords: regional poverty; decomposition; income contribution; inequality contribution; Shapley value; Croatia (search for similar items in EconPapers)
JEL-codes: D31 I32 (search for similar items in EconPapers)
Pages: 36 pages
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Working Paper: Accounting for regional poverty differences in Croatia: Exploring the role of disparities in average income and inequality (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iez:wpaper:1301
Access Statistics for this paper
More papers in Working Papers from The Institute of Economics, Zagreb Contact information at EDIRC.
Bibliographic data for series maintained by Doris Banicevic ().