Assessing the Between-Group Inequality Through Alternative Measures of Grouping: An Indian Evidence

Abstract

Conventionally the ratio of observed between-group inequality to the overall inequality is used to examine the contribution of between-group inequality to total inequality. It is also widely used for defining the relative importance of alternative types of grouping. This conventional statistic is criticized by some scholars on the ground of comparability and extreme benchmark. They have proposed an alternative measure and suggest using this measure as a complementary instrument to the former for examining the relative importance of different types of grouping in any country setting. However, they have not suggested any specific method to use these measures. The major objectives of this study are—to review the conventional and alternative measures for assessing the relative importance of alternative ways of grouping, and to specify the method of the use of these measures for this purpose. Furthermore, we apply these measures on Indian data and analyze the state of between-group inequality for some meaningful ways of grouping in India, and develop a discussion on the relative importance of these ways of groupings. This will enable planners and policymakers to design effective policies for reducing between-group inequality.