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The limitations of negative incomes in the Gini coefficient decomposition by source

Manero, Ana


Lerman and Yitzhaki (1985) developed a decomposition of the Gini coefficient by income source that has been extensively used in the literature. This method has strong limitations in the presence of negative incomes, which were not discussed by the original authors and have been widely overlooked in successive studies. Through theoretical argumentation and practical examples, this article shows that, when using negative incomes, (1) the original decomposition formulae become inappropriate, (2)...[Show more]

CollectionsANU Research Publications
Date published: 2016-10-27
Type: Journal article
Source: Applied Economics Letters
DOI: 10.1080/13504851.2016.1245828
Access Rights: Open Access


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