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Decomposition Procedures for Distributional analysis : A Unified Framework Based on the Shapley ValueAnthony F. ShorrocksUniversity of EssexandInstitute for Fiscal StudiesFirst draft, June 1999 Mailing Address:Department of EconomicsUniversity of EssexColchester CO4 3SQ, IntroductionDecomposition techniques are used in many fields of economics to help disentangle andquantify the impact of various causal factors. Their use is particularly widespread in studiesof poverty and inequality. In poverty analysis , most practitioners now employdecomposable poverty measures especially the Foster et al.
Shapley value to the decomposition of inequality by income components, but fail to realise that a similar procedure can be used in all forms of distributional analysis, regardless of the complexity of the model, or the number and types of factors considered.
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