The Palestinian Economy. Theoretical and Practical Challenges

Proceedings “The Palestinian Economy: Theoretical and Practical Challenges” 361
To take into account potential heterogeneity in the impact of these variables by SES, Eq.
(15) is then restored with the group-specific parameters ( bˆ g , ˆ g ). Thus,
ˆ ˆ , , ˆ ,
ˆ
,
(17)
4
ig , yˆi G x 1 i
b g
m 1 i
d g
F x 2 i g
m 2 i g
and the degree of inequality due to heterogeneity in behaviour with respect to
socioeconomic characteristics can be captured as,
I C C
(18)
yˆ
( SEC ) 4 y ˆ 3
i,g i
The last transformation is the one that captures the effect of variables not included in the
model. This can be obtained as,
I Cy
C
(19)
( R) i y ˆ4
i,g
Defining overall use-inequality in terms of medical-need (I (N) ) and non-need (I (NN) ) and
substituting the corresponding components (captured all above through Eq. 10– 19), the
overall use-inequality can, now, be fully revealed as,
I I I I I I I
(20)
y ( N) ( PP) ( CC) ( SEV) ( SEC) ( R)
and defining HI as the part of inequality that is not due heterogeneity in need gives,
HI I I I
y ( N) ( NN)
HI I I I I I
(21)
( PP) ( CC) ( SEV) ( SEC) ( R)
The HI index, as defined in Eq. (21), can be disentangled into two meaningful parts: (i)
the part that results from the (unequal) distributions of the variables and (ii) the part that