Inequality in Bolivia: A Shapley counterfactual decomposition using microdata from the 2024 household survey
DOI:
https://doi.org/10.35319/perspectivas.202657297Keywords:
Inequality, Decomposition, Labor incomeAbstract
This research aims to estimate the counterfactual decomposition of the Gini coefficient and related factors in income distribution and the labor market in Bolivia. To this end, a methodology was used that includes estimating the Gini coefficient, the kernel function, and Shapley decomposition, based on data from the 2024 Household Survey of the National Institute of Statistics. The estimated Gini coefficient for Bolivia is 0.4158, indicating a moderate level of inequality. When considering the area of residence, a notable difference is observed between urban areas, where the coefficient is 0.38, and rural areas, which reach 0.498. The department of Santa Cruz shows the lowest coefficient, 0.37, reflecting a more equitable income distribution. On the other hand, Potosí registers the highest value, 0.483. The bandwidth, which is 96.2385, suggests that each income value influences the density estimate of nearby values within a range of ±96.24 units. The results obtained through the Shapley decomposition of the Gini coefficient show that labor income explains 94% of total inequality in Bolivia in 2024, making it the almost absolute determinant of the prediction. The model depends primarily on income from work.
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