Inequality decomposition: methodology and instruments

The author considers two approaches to examination of the relation between inequality and poverty. The first one, based on decomposition of the relative poverty index (FGT index), allows one to find out the impact of economic growth dynamics and redistribution policy on the changes in the scale of inequality and poverty among households. The second one is based on decomposition of Gini coefficient. It shows the impact of different income sources on inequality in per capita income with the account of the processes of redistribution between the poor and non-poor members of households. Application of the methods to socio-economic analysis is demonstrated on the data from sociological surveys of population.