Gini Coefficient Decomposition in Iran in Terms of Urban and Rural Areas

In this paper a general view of the Gini decomposition is presented. In order to decompose the Gini coefficient into within group inequality، between group inequality and transvariation inequality of the Iranian urban and rural areas، the 2006 and 2010 micro-data and Dagum (1997) method is used. The results indicate that about 48 percent of the inequality in the country as a whole has been due to within group (urban and rural) inequality. About 26 (2006) and 22 (2010) percent of the inequality has been due to the inequality between urban and rural، while 27 (2006) and 29 (2010) percent of the inequality has been because of the transvariation inequality. Although more than half of the inequality has been caused by the gross inequality between urban and rural areas، ignoring the transvariation inequality، urban inequality has the most contribution of total inequality.