Advanced

A New Approach to Decomposition of a Bivariate Rank Dependent Index Using Recentered Influence Function Regression

Heckley, Gawain LU ; Gerdtham, Ulf LU and Kjellsson, Gustav LU (2014) In Working Paper / Department of Economics, School of Economics and Management, Lund University
Abstract
Socioeconomic related health inequality as measured by a bivariate rank dependent index, of which the concentration index is a leading example, is well documented across a wide number of countries and measures. To decompose an inequality index is to ascertain the potential causes of this measured inequality. Current available regression based decomposition methods applicable to bivariate rank dependent indices impose stringent conditions in order for them to recover the parameters of interest. In this paper we suggest an alternative and less demanding technique based on a recentered influence function (RIF) regression. Because of the less stringent conditions this method imposes, it is more likely to yield the parameters of interest and is... (More)
Socioeconomic related health inequality as measured by a bivariate rank dependent index, of which the concentration index is a leading example, is well documented across a wide number of countries and measures. To decompose an inequality index is to ascertain the potential causes of this measured inequality. Current available regression based decomposition methods applicable to bivariate rank dependent indices impose stringent conditions in order for them to recover the parameters of interest. In this paper we suggest an alternative and less demanding technique based on a recentered influence function (RIF) regression. Because of the less stringent conditions this method imposes, it is more likely to yield the parameters of interest and is therefore preferred over current best practice. The RIF regression approach is also simple to estimate and interpret: the regression yields average marginal effects of covariates on the rank dependent index and interpretation resembles that of standard conditional mean analysis and has strong links to the treatment effects literature. Interpretation of the RIF regression method applied to a bivariate rank dependent index is illustrated by way of an empirical example of income related health utility inequality. (Less)
Please use this url to cite or link to this publication:
author
organization
publishing date
type
Working Paper
publication status
published
subject
keywords
Health inequality, decomposition, rank-dependent index, recentered influence functions, Concentration index
in
Working Paper / Department of Economics, School of Economics and Management, Lund University
issue
36
pages
36 pages
publisher
Department of Economics, Lund Universtiy
language
English
LU publication?
yes
id
3574b8d0-d63a-47a7-bfd8-953ce97f7c0c (old id 4814675)
alternative location
http://swopec.hhs.se/lunewp/abs/lunewp2014_036.htm
date added to LUP
2014-11-27 16:38:10
date last changed
2016-04-16 08:13:19
@misc{3574b8d0-d63a-47a7-bfd8-953ce97f7c0c,
  abstract     = {Socioeconomic related health inequality as measured by a bivariate rank dependent index, of which the concentration index is a leading example, is well documented across a wide number of countries and measures. To decompose an inequality index is to ascertain the potential causes of this measured inequality. Current available regression based decomposition methods applicable to bivariate rank dependent indices impose stringent conditions in order for them to recover the parameters of interest. In this paper we suggest an alternative and less demanding technique based on a recentered influence function (RIF) regression. Because of the less stringent conditions this method imposes, it is more likely to yield the parameters of interest and is therefore preferred over current best practice. The RIF regression approach is also simple to estimate and interpret: the regression yields average marginal effects of covariates on the rank dependent index and interpretation resembles that of standard conditional mean analysis and has strong links to the treatment effects literature. Interpretation of the RIF regression method applied to a bivariate rank dependent index is illustrated by way of an empirical example of income related health utility inequality.},
  author       = {Heckley, Gawain and Gerdtham, Ulf and Kjellsson, Gustav},
  keyword      = {Health inequality,decomposition,rank-dependent index,recentered influence functions,Concentration index},
  language     = {eng},
  number       = {36},
  pages        = {36},
  publisher    = {ARRAY(0x9a69e70)},
  series       = {Working Paper / Department of Economics, School of Economics and Management, Lund University},
  title        = {A New Approach to Decomposition of a Bivariate Rank Dependent Index Using Recentered Influence Function Regression},
  year         = {2014},
}