A unified structural equation modeling approach for the decomposition of rank-dependent indicators of socioeconomic inequality of health

In this paper we present a unified structural equation modeling (SEM) framework for the regression-based decomposition of rank-dependent indicators of socioeconomic inequality of health and compare it with simple ordinary least squares (OLS) regression. The SEM framework forms the basis for a proper use of the most prominent one- and two-dimensional decompositions and provides an argument for using the bivariate multiple regression model for two-dimensional decomposition. Within the SEM framework, the two-dimensional decomposition integrates the feedback mechanism between health and socioeconomic status and allows for dierent sets of determinants of these variables. We illustrate the SEM approach and its outperformance to OLS using data from the Ethiopia 2011 Demographic and Health Survey (DHS).