Naslov
Decomposing the difference between well-being inequality and income inequality: method and application

Autori
Ledić, Marko ; Rubil, Ivica

Vrsta, podvrsta i kategorija rada
Poglavlja u knjigama, znanstveni

Knjiga
What Drives Inequality?

Urednik/ci
Decancq, Koen ; Van Kerm, Philippe

Izdavač
Emerald Group Publishing

Grad
Bradford

Godina
2019

Raspon stranica
105-122

ISBN
978-1-78973-377-8

ISSN
1049-2585

Ključne riječi
Equivalent income ; well-being inequality ; income inequality ; decomposition ; preferences ; European Union

Sažetak
The authors study the difference between multidimensional well-being inequality and income inequality and propose a method to decompose the difference between the Gini coefficients of income and equivalent income (EI), a multidimensional well-being measure that respects individual preferences towards what constitutes a good life. The authors propose a method to decompose the inequality difference into two parts: the vertical and reranking effects. The vertical effect arises from the correlation between income and non-income dimensions, and between income and preferences. The reranking effect arises from the fact that some persons occupy a different position in the EI distribution compared to the income distribution. The authors also propose a detailed decomposition method based on the Shapley value to decompose each of the two effects by non-income dimensions. The authors apply the decompositions using data for 27 countries, considering five non-income dimensions: unemployment, health, housing, crime and environment. The results show that inequality is much higher for EI that the reranking effect accounts for a large part of the inequality difference, and that health is the non-income dimension contributing most to both effects.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA