{smcl} {* Last modified: 21 Jan 2025}{...} {hline} help for {hi:ginidecomp}{right: Authors: Vesa-Matti Heikkuri and Matthias Schief (revised Jan 2025)} {hline} {title:Syntax} {p 8 17 2} {cmd:ginidecomp} {it:varname} [{it:weights}] [{cmd:if} {it:exp}] [{cmd:in} {it:range}] [, {cmdab:by:group}{cmd:(}{it:groupvar}{cmd:)}] {p 4 4 2} {cmd:fweight}s, {cmd:aweights}, {cmd:pweights}, and {cmd:iweights} are allowed; see {help weights}. {p 4 4 2} Multiple variables may be provided as {it:groupvar}. In this case, the program will use the {cmd: egen group()} command to define population subgroups based on the unique combinations of values across all the specified variables; see {help egen}. {title:Description} {p 4 4 2} The {cmd:ginidecomp} command calculates the Gini coefficient and decomposes it by population subgroups. The decomposition follows the methodology introduced in Heikkuri and Schief (2024). {p 4 4 2} By default, missing values in the {it:groupvar} variables are treated as group identifiers. If you wish to exclude observations with missing {it:groupvar} values, you should use the {cmd:if} {it:!missing(groupvar)} option (see example below). {p 4 4 2} If the {cmdab:by:group} option is not specified, the program only returns the aggregate Gini coefficient. {title:Technical details} {p 4 4 2} Consider a population that is partitioned into K subgroups and suppose we want to decompose income inequality. Subgroup k’s Gini coefficient, population share, and income share are denoted by G_k, pi_k, and theta_k, respectively. {p 4 4 2} The within-group inequality term is a weighted power mean of subgroup Gini coefficients with each subgroup weighted by the geometric mean of its income and population share: {p 17 17 2} G_w = [∑ (pi_k theta_k G_k)^(1/2)]^2 {p 4 4 2} The between-group inequality is the difference between the cross mean absolute difference, Theta, and a weighted sum of geometric averages of subgroup mean absolute differences, delta_k, divided by twice the aggregate mean, mu: {p 17 17 2} G_w = (2 mu)^(-1) [Theta - ∑∑ pi_k pi_l sqrt(delta_k delta_l)] {p 4 4 2} Theta is obtained as the population mean absolute difference when evaluating all within-group differences as zero. For details, see Heikkuri and Schief (2024). {title:Options} {p 4 8 2} {cmd:bygroup(}{it:groupvar}{cmd:)} requests inequality decompositions by population subgroup, with subgroup membership defined by {it:groupvar}. {title:Saved results} r(gini) Aggregate Gini coefficient r(within) Within-group inequality r(between) Between-group inequality r(within_pct) Within-group inequality (%) r(between_pct) Between-group inequality (%) {title:Examples} {p 4 8 2}{cmd:. ginidecomp income [aw = wgtvar]} {p 4 8 2}{cmd:. ginidecomp income, by(age_group) } {p 4 8 2}{cmd:. ginidecomp income if fullTimeWork==1, by(age_group)} {p 4 8 2}{cmd:. ginidecomp income, by(age_group sex)} {p 4 8 2}{cmd:. ginidecomp income if !missing(age_group) & !missing(sex), by(age_group sex)} {p 4 8 2}{cmd:. ginidecomp income in 1/100, by(sex)} {title:Authors} {p 4 4 2}Vesa-Matti Heikkuri {break} Tampere University {p 4 4 2}Matthias Schief {break} Organisation for Economic Co-operation and Development (OECD) {title:Acknowledgements} {p 4 4 2} The program ginidecomp partly builds on "ineqdecgini.ado" by Stephen P. Jenkins {title:References} {p 4 4 2} Heikkuri, Vesa-Matti, and Matthias Schief. {it:Subgroup Decomposition of the Gini Coefficient: A New Solution to an Old Problem}. FIT Working Paper 30, 2024. {browse "https://verotutkimus.fi/verotutkimus/wp-content/uploads/2024/12/FIT-WP-30-Heikkuri-Schief-Gini-Decomposition-3.pdf"}.