Compare methods

	Shapley Decomposition of Inequality	Datt-Ravallion Decomposition
Field	Economics	Economics
Family	Process / pipeline	Process / pipeline
Year of origin	2013	1992
Originator	Anthony Shorrocks (working paper 1999; published 2013)	Gaurav Datt & Martin Ravallion
Type	Axiomatic decomposition procedure	Poverty-change decomposition
Seminal source	Shorrocks, A. F. (2013). Decomposition procedures for distributional analysis: a unified framework based on the Shapley value. Journal of Economic Inequality, 11(1), 99–126.	Datt, G., & Ravallion, M. (1992). Growth and redistribution components of changes in poverty measures: a decomposition with applications to Brazil and India in the 1980s. Journal of Development Economics, 38(2), 275–295.
Aliases	Shapley Decomposition, Shorrocks Shapley Decomposition, Factor Decomposition of Inequality, Shapley Value Distributional Decomposition	Growth-Redistribution Decomposition, Datt-Ravallion Method, Growth and Redistribution Components, Poverty Change Decomposition
Related	4	3
Summary	The Shapley decomposition, formalized for distributional analysis by Anthony Shorrocks (in a widely circulated 1999 working paper, published in 2013), is a general procedure for attributing an inequality or poverty statistic to its contributing factors — income sources, population subgroups, or determinants. It borrows the Shapley value from cooperative game theory: each factor's contribution is its average marginal effect on the indicator across all possible orders in which factors could be eliminated. The result is an exact, symmetric, residual-free decomposition that applies to any indicator, even those (like the Gini) that have no natural analytic decomposition of their own.	The Datt-Ravallion decomposition, introduced by Gaurav Datt and Martin Ravallion in 1992, separates the observed change in a poverty measure between two dates into a growth component — the change attributable to a shift in mean income holding the relative distribution fixed — and a redistribution component — the change attributable to a shift in the Lorenz curve holding mean income fixed. A residual captures the interaction between the two. It became the standard way to ask whether falling poverty was driven by rising average incomes or by changes in inequality, and underlies the empirical literature on pro-poor growth.