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Wealth inequality: Theory, measurement and decomposition
Author(s) -
Davies James B.,
Fortin Nicole M.,
Lemieux Thomas
Publication year - 2017
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12313
Subject(s) - inequality , econometrics , context (archaeology) , index (typography) , economics , distribution (mathematics) , capital (architecture) , covariate , wealth distribution , decomposition , income distribution , mathematics , computer science , geography , mathematical analysis , ecology , world wide web , biology , archaeology
This paper reviews the basic principles of inequality measurement, underlining the advantages and shortcomings of alternative measures from a theoretical standpoint and in the context of the study of the distribution of wealth. Adopting the two most popular measures, the Gini index and the P‐shares, the paper documents wealth inequality in Canada using the 1999, 2005 and 2012 Survey of Financial Security (SFS). It carries out several decompositions with covariates, featuring DFL‐type reweighting methods and Gini and P‐shares RIF regressions. The latter parallel decompositions deepen our understanding of how changes in socio‐demographic characteristics, including the compensating role of family formation and human capital, impact wealth inequality.