LORENZ DECOMPOSITION AND INTERDISTRIBUTIONAL LORENZ COMPARISONS

Abstract

We use recently developed methods to perform decompositions of the Lorenz curve in the United States by race, region, and marital status. The decomposed Lorenz ordinates are used to construct interdistributional Lorenz curves (ILCs), which allow us to identify an economic advantage by one subgroup over another or changes in economic advantage over time. We propose asymptotically distribution-free estimators for the ILCs and apply these estimators to data from the Current Population Survey for 1977 and 1997. As one might expect, there are economic advantages by race, region, and marital status, even in 1997. Economic advantage is greatest for marital status and smallest for region in both years. We find significant convergence (i.e. a smaller economic advantage) over time by race and region, though not by marital status.

Citation

Bishop, J.A., Chow, K.V. and Zeager, L.A. (2004), "LORENZ DECOMPOSITION AND INTERDISTRIBUTIONAL LORENZ COMPARISONS", Bishop, J.A. and Amiel, Y. (Ed.) Studies on Economic Well-Being: Essays in the Honor of John P. Formby (Research on Economic Inequality, Vol. 12), Emerald Group Publishing Limited, Leeds, pp. 159-177. https://doi.org/10.1016/S1049-2585(04)12006-1