The Use of Diversity Analysis to Assess the Relative Influence of Factors Affecting the Income Distribution

This article uses diversity measures based on quadratic entropy to analyze the relative effects of factors such as age, sex, and education on the income distribution. In particular, sex appears to be as important as education in explaining the overall income inequality in the data collected by the U.S. Bureau of the Census. An advantage of the diversity measures is that they possess a decomposition of the total inequality into between-group and within-group components. Moreover, analogs of partial association enable one to study the effects of several factors. By using several measures, our inferences are shown to be robust.

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