Oaxaca-Blinder_decomposition
The Blinder–Oaxaca decomposition (/ˈblaɪndərwɑːˈhɑːkɑː/), also known as Kitagawa decomposition, is a statistical method that explains the difference in the means of a dependent variable between two groups by decomposing the gap into within-group and between-group differences in the effect of the explanatory variable.
The method was introduced by sociologist and demographer Evelyn M. Kitagawa in 1955.[1] Ronald Oaxaca introduced this method in economics in his doctoral thesis at Princeton University and eventually published in 1973.[2] The decomposition technique also carries the name of Alan Blinder who proposed a similar approach in the same year.[3] Oaxaca's original research question was the wage differential between two different groups of workers (male vs. female), but the method has since been applied to numerous other topics.[4]