Duclos-Jalbert-Araar decomposition of redistributive effect: implementation issues

Ivica Urban

MPRA Paper from University Library of Munich, Germany

Abstract: When there is a large number of pre-fiscal income equals in the sample, the redistributive effects based on the Gini index may be inappropriately estimated. Due to its roots in the Gini framework, the problem also appears in the application of the Duclos, Jalbert and Araar (2003) (DJA) decomposition of redistributive effects into vertical, classical horizontal inequity and reranking effects. This paper explains how the DJA implementation procedure must be adapted to produce correct estimates of different effects. The procedure is first illustrated on the 12-units hypothetical population and then applied to real data for the Croatian fiscal subsystem comprised of social security contributions, personal income tax, public pensions and cash social benefits.

Keywords: redistributive effect; vertical equity; horizontal equity; pre-fiscal equals (search for similar items in EconPapers)
JEL-codes: D63 H23 (search for similar items in EconPapers)
Date: 2011-01-11
New Economics Papers: this item is included in nep-pub
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Citations: View citations in EconPapers (1)

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