Decompositions of Income Inequality Measures: the Case of Gini and Entropy Coefficients

Income inequality measures involve two sub-classes of decomposable measures: those decomposed by sub-groups and those decomposed by income source. The former enables one to compute between- and within-group indices. The latter allows for gauging the inequality related to each factor of income (labour income, capital income, social taxes, etc.). The aim of this article is, oil the one hand, to review the construction of the two decomposition techniques and, on the other hand, to point, out the underlying debate they lead to, and particularly the convergence towards the use of a simultaneous method based oil both decompositions.