A longitudinal decomposition of Zenga’s new inequality Index

Name: A longitudinal decomposition of Zenga’s new inequality Index
Brand: Vita e Pensiero
Availability: OnlineOnly

digital

Article

Magazine

STATISTICA & APPLICAZIONI

Section

Open Access

Title

A longitudinal decomposition of Zenga’s new inequality Index

Authors

Mauro Mussini, Michele Zenga

Publisher

Vita e Pensiero

Format

Article |

Pdf

Pages

Online from

01-2013

Issn

1824-6672 (print) | 2283-6659 (digital)

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Description Readers' comments

The paper proposes a three-term decomposition of Zenga’s new inequality index over time. Given an initial and a final time, the link among inequality trend, re-ranking, and income growth is explained by decomposing the inequality index at the final time into three components: one measuring the effect of re-ranking between individuals, a second term gauging the effect of disproportional growth between individuals’ incomes, and a third component measuring the impact of the inequality existing at the initial time. The decomposition allows one to distinguish the determinants of inequality change from the contribution of the inequality at the initial time to the inequality at the final time. We applied the decomposition to Italian household income data collected by the Survey on Household Income and Wealth of the Bank of Italy, waves 2008-2010.

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