AEA Papers and Proceedings
ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)
Analytic Approaches to Measuring the Black-White Wealth Gap
AEA Papers and Proceedings
vol. 114,
May 2024
(pp. 186–90)
Abstract
Does the measurement of the racial wealth gap shift depending on the model, method, and dataset used? We contrast the traditional mean Oaxaca-Blinder decomposition with the distributional Recentered Influence Function (RIF) methods. The untransformed, logarithm-transformed, and inverse hyperbolic sine-transformed versions in both the Survey of Consumer Finances and Panel Study of Income Dynamics datasets exhibit similarities. The Oaxaca-Blinder (mean) decomposition highlights that receiving an inheritance explains a larger portion of the racial wealth gap than educational attainment. Conversely, the RIF method at the median suggests that educational attainment accounts for more of the wealth gap than inheritance receipt.Citation
Toney, Jermaine, Fenaba R. Addo, and Darrick Hamilton. 2024. "Analytic Approaches to Measuring the Black-White Wealth Gap." AEA Papers and Proceedings, 114: 186–90. DOI: 10.1257/pandp.20241124Additional Materials
JEL Classification
- D31 Personal Income, Wealth, and Their Distributions
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- I20 Education and Research Institutions: General
- J15 Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination