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From |
Nicola Pensiero <nicola.pensiero@gmail.com> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
st: shift-share analysis (counterfactual) of inequality changes by subgroups using ineqdeco |

Date |
Wed, 13 Jun 2012 10:51:28 +0200 |

Dear STATA users, my question is related to the shift-share analysis (counterfactual) of inequality changes by subgroups using the module ineqdeco. The problem is that the estimated counterfactual Theil (GE(1)) value is negative, which probably means that the implementation of the formula is wrong in some ways. I have households groups with a given income measured in two years (1977 and 2010). Given the quantities household type mean and population share of group x, I ask what would have happened to inequality (within and between groups) in year 2010 if the subgroup population share, v_k was the one of year 1977. My implementation of the counterfactual exercise is as follows. I saved the subgroup population share v_x from year 1977 ineqdeco income1977, by (group) foreach x of num 1/30 { local v_`x' = r(v_`x') } Then I saved the subgroup income share s_x and GE_k for year 2010. ineqdeco income2010, by (group) foreach x of num 1/30 { local s_`x' = r(theta_`x') } foreach x of num 1/30 { local GE_alpha1_`x' = r(ge1_`x') } Finally, I used the subgroup population share from year 1977 and the subgroup income share and GE_k from year 2010 in the calculation of Theil index GE(1). foreach num of numlist 1/30 { local my_GE`num' = `v_`num''^0 * `s_`num''^1 * `GE_alpha1_`num'' + `v_`num''^0 * `s_`num''^1* log(`s_`num''^1) } local my_GEglobal = `my_GE1' +........ `my_GE30' Thank you, Nicola Pensiero PS: the index should be decomposed in its within and between components as follows: GE = SUM [v_k^(1-a)] . [s_k^a] . GE_k(a) + GE_Between(a) where GE_B(a) is derived assuming every person within a given subgroup k received k's mean income, m_k. * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**Follow-Ups**:**Re: st: shift-share analysis (counterfactual) of inequality changes by subgroups using ineqdeco***From:*Austin Nichols <austinnichols@gmail.com>

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