Unit Consistency And Bipolarization Of Income Distributions
AbstractMany polarization measures proposed in the literature assume some invariance condition. Clearly, each invariance condition imposes a specific value judgment on polarization measurement. In inequality and poverty measurement, B. Zheng suggests rejecting these invariance conditions as axioms, and proposes replacing them with the unit-consistency axiom. This property demands that the inequality or poverty rankings, rather than their cardinal values, are not altered when income is measured in different monetary units. Following Zheng's proposal we explore the consequences of the unit-consistency axiom in the bipolarization field. We introduce a new family of Krtscha-type intermediate bipolarization indices, and also propose and characterize a class of intermediate polarization orderings which are unit-consistent. Finally, a short empirical application using data from Spain is also provided to illustrate how the bipolarization orderings proposed may be used in practice. Copyright 2009 The Authors. Journal compilation International Association for Research in Income and Wealth 2009.
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Bibliographic InfoArticle provided by International Association for Research in Income and Wealth in its journal Review of Income and Wealth.
Volume (Year): 56 (2010)
Issue (Month): 1 (03)
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Other versions of this item:
- Ma Casilda Lasso de la Vega & Ana Urrutia & Henar Diez, 2008. "Unit-consistency and polarization of income distributions," Working Papers 100, ECINEQ, Society for the Study of Economic Inequality.
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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