Discrimination or differing model structures?

Article type: Research Article

Authors: Zhao, Bojuan B.^a | Shyr, Yu^{b; c; *}

Affiliations: [a] Tianjin University of Finance and Economics, Tianjin 300222, P.R. China | [b] Division of Cancer Biostatistics, Department of Biostatistics; Cancer Biostatistics Center, Vanderbilt-Ingram Cancer Center; Vanderbilt University School of Medicine, Nashville, TN 37232-6848, USA | [c] National Cheng Kung University, Taiwan

Correspondence: [*] Corresponding author. Tel.: +1 615 936 2572; Fax: +1 615 936 2602; E-mail: [email protected]

Abstract: The Blinder-Oaxaca (B-O) decomposition has been widely used in continuous outcome comparisons between two groups of people; however, controversies and limitations with this method remain. In this paper, operating under the same-model structure, we suggest employing a multiple regression using a dummy variable to represent discrimination, and we compare this strategy with results obtained from a B-O decomposition and a Neumark decomposition, both in theory and using a simulation study. In addition, we extend these methods to cover binary outcomes.

Keywords: Blinder-Oaxaca decompostion, Neumark decomposition, multiple regression, discrimination

DOI: 10.3233/JEM-2009-0320

Journal: Journal of Economic and Social Measurement, vol. 34, no. 2-3, pp. 159-174, 2009