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The Stata Journal
Volume 8 Number 4: pp. 480-492



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The Blinder–Oaxaca decomposition for nonlinear regression models

Mathias Sinning
RSSS at the Australian National University, and IZA
Canberra, Australia
[email protected]
Markus Hahn
Melbourne Institute of Applied Economic and Social Research
The University of Melbourne
Melbourne, Australia
[email protected]
Thomas K. Bauer
RWI Essen, Ruhr-Universität Bochum, and IZA
Bochum, Germany
[email protected]
Abstract.   In this article, a general Blinder–Oaxaca decomposition for nonlinear models is derived, which allows the difference in an outcome variable between two groups to be decomposed into several components. We show how, using nldecompose, this general decomposition can be applied to different models with discrete and limited dependent variables. We further demonstrate how the standard errors of the estimated components can be calculated by using Stata's bootstrap command as a prefix.
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