The Disaggregation of the Gini Coefficient by Factor Components and Its Applications to Australia.

This paper demonstrates the proper use of the disaggregation of the Gini coefficient by factor components by deriving a formula of the elasticity of the Gini coefficient with respect to specific income components. The method is then applied to Australian household expenditure survey data to find the effects of various components of income on overall income inequality. The results are important in examining the effects of growth in specific components on the overall inequality and, hence, in policy decisions with respect to redistribution of income. Copyright 1993 by The International Association for Research in Income and Wealth.