Oaxaca decomposition
Oaxaca decomposition is a statistical method that explains the difference in the means of a dependent variable between two groups by decomposing the gap into that part that is due to differences in the mean values of the independent variable within the groups, on the one hand, and group differences in the effects of the independent variable, on the other hand. The method was introduced by Ronald Oaxaca in his doctoral thesis at Princeton University and eventually published in 1973.[1] Oaxaca's original research question was the wage differential between two different groups of workers, but his method has since been applied to numerous other topics.[2]
See also
References
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