Journal
JOURNAL OF HEALTH ECONOMICS
Volume 31, Issue 1, Pages 15-21Publisher
ELSEVIER SCIENCE BV
DOI: 10.1016/j.jhealeco.2011.11.005
Keywords
Ordered response health data; Inequality measurement; Health inequality; Ordinal data; Decomposition
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We present a class of decomposable inequality indices for ordinal data (e.g. self-reported health survey). It is characterized by well-known inequality axioms (e.g. scale invariance) and a decomposability axiom which states that an index can be represented as a function of inequality values in subgroups and subgroup sizes. The only decomposable indices are strictly monotonic transformations of the weighted average of frequencies in categories. Among the indices proposed in the literature only the absolute value index (Abul Naga and Yalcin, 2008: Apouey, 2007) is decomposable. As an empirical illustration we calculate regional contributions to overall health inequality in Switzerland. (C) 2011 Elsevier B.V. All rights reserved.
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