In this paper we propose a decomposition of the Theil measures of per capita income inequality which accounts for interaction effects between its multiplicative factors. Our theoretical findings, supported by an empirical application referring to EU-25 countries, suggest that neglecting these effects may strongly bias the relative importance of some factors, with consequent misleading policy implications.
Factor decomposition of cross-country income inequality with interaction effects
BRACALENTE, Bruno;PERUGINI, CRISTIANO
2008
Abstract
In this paper we propose a decomposition of the Theil measures of per capita income inequality which accounts for interaction effects between its multiplicative factors. Our theoretical findings, supported by an empirical application referring to EU-25 countries, suggest that neglecting these effects may strongly bias the relative importance of some factors, with consequent misleading policy implications.File in questo prodotto:
Non ci sono file associati a questo prodotto.
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
