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© The Authors. Economic Record published by John Wiley & Sons Australia, Ltd on behalf of Economic Society of Australia The main purpose of this paper is to compare the decomposition properties of rank-dependent and level-dependent indicators of income-related inequality of health. We do so by focusing on the decomposition by population groups. We show that level-dependent indices have more desirable subgroup decomposability properties than rank-dependent indices. This may prove to be an important argument in favour of the use of level-dependent indices. The difference between the subgroup decomposition results of rank-dependent and level-dependent indices is illustrated by means of an empirical study using Australian health and income data. We consider subgroups based on sex, age and employment status.

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Economic Record

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