A unified framework to decomposing inequality with illustrations to some Arab countries

Abstract EN

It is common to decompose the inequality indices of the General Entropy class to understand economic inequality and guide the design of economic policy.

Elbe's et al.

(2008) suggest an improved approach to inequality decomposition of those indices which is less sensitive to the degree of sub-partitioning of population groups than the conventional decompositions.

In this paper, we extend the approach of Elbe's et al.

(2008) to the β class of inequality indices which includes a large variety of inequality indices.

This class generalizes and comprises different well-known families of inequality indices as particular cases.

Moreover, some of its members enable to focus on a particular part of the income distribution at which redistributive policies could be aimed.

We illustrate our methodology using micro datasets from six Arab countries to offer a reassessment of between-group inequality in these countries.