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Unit Consistency And Bipolarization Of Income Distributions

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  • M-super-a Casilda Lasso de la Vega
  • Ana Urrutia
  • Henar Díez

Abstract

Many 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 Info

Article 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)
Pages: 65-83

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Handle: RePEc:bla:revinw:v:56:y:2010:i:1:p:65-83

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References

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  1. Pfingsten, Andreas, 1986. "Distributionally-neutral tax changes for different inequality concepts," Journal of Public Economics, Elsevier, vol. 30(3), pages 385-393, August.
  2. Joe C. Davis & John H. Huston, 1992. "The Shrinking Middle-Income Class: A Multivariate Analysis," Eastern Economic Journal, Eastern Economic Association, vol. 18(3), pages 277-285, Summer.
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  10. Ma Casilda Lasso de la Vega & Ana Marta Urrutia, 2006. "An Alternative Formulation of the Esteban-Gradín-Ray Extended Measure of Polarization," Journal of Income Distribution, Journal of Income Distribution, vol. 15(I), pages 42-54, December.
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  13. Claudio Zoli, . "A Surplus Sharing Approach to the Measurement of Inequality," Discussion Papers 98/25, Department of Economics, University of York.
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Cited by:
  1. Clementi, F. & Schettino, F., 2013. "Income polarization in Brazil, 2001-2011: A distributional analysis using PNAD data," 2013 Second Congress, June 6-7, 2013, Parma, Italy 149891, Italian Association of Agricultural and Applied Economics (AIEAA).
  2. Gaston Yalonetzky, 2014. "Relative bipolarization Lorenz curve," Economics Bulletin, AccessEcon, vol. 34(2), pages 1103-1113.
  3. Gaston Yalonetzky, 2013. "Relative bipolarization quasi-ordering based on Between-Group Gini (BGG) curves," Working Papers 318, ECINEQ, Society for the Study of Economic Inequality.
  4. Satya Chakravarty & Bhargav Maharaj, 2012. "Ethnic polarization orderings and indices," Journal of Economic Interaction and Coordination, Springer, vol. 7(1), pages 99-123, May.

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