Between group inequality and targeted transfers

This paper provides two extensions to the group decomposition of the Gini i ndex by Yitzhaki and Lerman. First, within group, stratification, and betwe en group inequality are analyzed along several dimensions at once. This pro vides for a better understanding of the determinants of inequality. Second, the impact on the Gini of marginal changes in income or consumption by gro up is derived. This can be used to evaluate targeted redistributive policie s or assess the impact of exogenous shocks by group. The analysis is applie d to data from Bangladesh with a focus on the impact of land ownership, edu cation, and occupation on inequality.