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The Palestinian Economy. Theoretical and Practical Challenges

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360<br />

Abu-Zaineh – Mataria<br />

<br />

ˆ ˆ<br />

<br />

ˆ ˆ <br />

ig , yˆ<br />

G xbm d F x m<br />

(11)<br />

2a ,<br />

ig , 1 1i , g 2 2i ,<br />

<strong>The</strong> extent of inequality that is attributed to heterogeneity in behaviour associated with<br />

participation part can be captured as,<br />

I C C y<br />

(12)<br />

ˆ<br />

( PP) yˆ 2,<br />

a 1<br />

i, . g i<br />

Likewise, heterogeneity in behaviour as per conditional usage can be obtained as,<br />

<br />

ˆ ˆ<br />

<br />

ˆ ˆ <br />

ig , yˆ<br />

G xbm d F x m<br />

(13)<br />

2b ,<br />

ig , 1 1i , g 2 2i , g<br />

<strong>and</strong> the degree of inequality due to heterogeneity in conditional usage can be captured as,<br />

I C C<br />

(14)<br />

yˆ<br />

( CC) 2, b yˆ<br />

2,<br />

a<br />

ig , i,g<br />

Considering the effect of socioeconomic characteristics, the distribution in Eq. (13) can<br />

be reproduced such that socioeconomic variables are allowed to vary amongst the<br />

population. Thus,<br />

ˆ ˆ , , ˆ ,<br />

ˆ<br />

,<br />

<br />

ˆ 3<br />

i 1i 1i g 2i 2i g<br />

i y G x bm d F x m<br />

(15)<br />

<strong>The</strong> part of inequality due to the distribution of socioeconomic variables can be<br />

captured as,<br />

I C C<br />

(16)<br />

y<br />

( SEV )<br />

ˆ3 yˆ<br />

2,<br />

b<br />

i i,g<br />

Note that the simulated distribution obtained from Eq. (15) employs the individual<br />

specific- socioeconomic characteristics ( x j. i ), but the population-wide effect ( bˆ <strong>and</strong> ˆ ).

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