Thursday, April 2 2020, 15:02 pm
Explaining Differences between Groups: Oaxaca Decomposition

Explaining Differences between Groups: Oaxaca Decomposition

Explaining Differences between Groups: Oaxaca Decomposition 149 The gap between the mean outcomes, ynonpoor and ypoor, is equal to (12.2) yy x xnonpoor poor nonpoor nonpoor poor poor−= −ββ where xnonpoor and xpoor are vectors of explanatory variables evaluated at the means for the nonpoor and the poor, respectively.2 For example, if we have just two x’s, x