Additive Decompositions with Interaction Effects

No 6730, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper proposes a comprehensive, path-independent decomposition formula of changes into ceteris paribus effects and interaction effects. The formula implies a reassessment of sequential decomposition methods that are widely used in the literature and that are restrictive in how they treat interaction effects. If counterfactual outcomes are correctly specified, it may also be viewed as a description of certain aspects of causality in the situation where more than one causal influence is present.

Keywords: Oaxaca-Blinder decomposition; interaction effects; ceteris paribus effects (search for similar items in EconPapers)
JEL-codes: C02 D31 J31 J71 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2012-07
New Economics Papers: this item is included in nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Published - revised version published in: Applied Economics Letters, 2014, 21 (9), 636-642

Downloads: (external link)
https://docs.iza.org/dp6730.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp6730

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().