help for drdecompJoao Pedro Azevedo
Andrés Castaneda
Viviane Sanfelice

Shapley value of growth and distribution components of on changes in poverty indicators

drdecomp
welfarevar
[weight]
[if exp]
[in exp],
by(varname)
varpl(varlist)
[
indicator(string)
mpl(numlist)
]

fweights and aweights are allowed; see help weights. See help weight.

Description

drdecomp implements the shapley value of the Datt and Ravallion (1992) decomposition of changes in a welfare indicator into growth and distribution,
however, following the shapley and non parametric methodology suggested by Shorrocks (1999/2012) and Kolenikov and Shorrocks (2003).

For examples of applications please see Azevedo and Sanfelice (2012) and Ferreira et al (2012).

Where

welfarevar is the welfare aggregate variable.

by is the comparison indicator. It must take two categorical values and is usually defines two points
in time or two geographic locations, which the difference of the indicator of choice is being decomposed.

varpl(varname) poverty line variable.

Options

indicator(string) poverty indicators. fgt0, fgt1, fgt2 are the currently supported options. fgt0 is the indicator default.

mpl(numlist) allow to calculate the poverty indicators by range using multiples of the poverty line.

Saved Results

drdecomp returns results in r() format.
By typing return list, the following results are reported:

Matrices

r(b) average effect of the two factors and the total change on the poverty indicator.

r(shapley) besides the average effect, returns the contribution for the two paths.

r(poverty) returns the value of the indicator by categorical value of by.

Obs: On the reported matrices

Indicator label: 0 - FGT(0); 1 - FGT(1); 2 - FGT(2).

Effect label: 1 represents the growth; 2 redistribtuion and 3 the total change on the indicator.

Line label (if mpl specified): 1 represents the first multiple; 2 the second, and so on. The last indicates the range from the last multiple and the maximun value.

Examples

. drdecomp percapitainc, by(year) varpl(pline)

. drdecomp percapitainc, by(year) varpl(pline) in(fgt0 fgt1 fgt2)

. drdecomp percapitainc, by(year) varpl(pline) mpl(1 3.5 6)

(click to run the example below)

. use exdata_drdecomp, clear

. drdecomp income [w=weight], by(year) varpl(lp_4usd_ppp) ///
. in(fgt0 fgt1 fgt2)

References

Azevedo, Joao Pedro and Viviane Sanfelice (2012) "The rise of the middle class in Latin America". World Bank (mimeo).

Ferreira, Francisco H.G.; Messina, Julian; Rigolini, Jamele; López-Calva, Luis-Felipe; Lugo, Maria Ana; Vakis, Renos. (2013) Economic Mobility and the Rise of the Latin American Middle Class. Washington, DC: World Bank.
(link to publication)

Datt, G.; Ravallion, M. (1992) Growth and Redistribution Components of Changes in Poverty Measures: A Decomposition with Applications to Brazil and India in the 1980s. Journal of Development Economics, 38: 275-296.

Shorrocks, A. F. (2012) Decomposition procedures for distributional analysis: a unified framework based on the Shapley value. Journal of Economic Inequality.

Shorrocks, A.; Kolenikov, S. (2003) A Decomposition Analysis of Regional Poverty in Russia, Discussion Paper No. 2003/74 United Nations University.

World Bank (2011) On The Edge Of Uncertainty: Poverty Reduction in Latin America and the Caribbean during the Great Recession and Beyond. LAC Poverty and Labor Brief. World Bank: Washington DC.
(link to publication)

Authors

Joao Pedro Azevedo, jazevedo@worldbank.org

Andres Castanedas, acastanedaa@worldbank.org

Viviane Sanfelice, vsanfelice@worldbank.org

Acknowledgements

This program was developed by the LAC Team for Statistical Development (2012), in the Latin American and Caribbean Poverty Reduction and Economic Managment Group of the World Bank.

Also see

Online: help for gidecomposition; apoverty; ainequal; wbopendata; adecomp; mpovline; skdecomp (if installed)