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Relative deprivation: a new derivation and application

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  • Jaesang Sung
  • Qihua Qiu
  • James Marton

Abstract

We derive and express the Yitzhaki index of relative deprivation as a function of mean and median household income within a reference group and one’s income, under the assumption that individual income follows the log-normal distribution or the Pareto distribution. We also suggest a way to calculate annual US regional mean and median household income in each reference group using aggregate income and household size data. Therefore, unlike prior literature that utilizes Decennial Census data due to its big sample size, our suggested methodology allows annual calculation of relative deprivation at different levels of geography (state or county). In an application of the derived index presented to illustrate its feasibility, we analyse the relationship between relative deprivation and mental health, finding suggestive evidence that increases in relative deprivation negatively affect mental health in the United States.

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  • Jaesang Sung & Qihua Qiu & James Marton, 2021. "Relative deprivation: a new derivation and application," Applied Economics Letters, Taylor & Francis Journals, vol. 28(9), pages 784-787, May.
    • Handle: RePEc:taf:apeclt:v:28:y:2021:i:9:p:784-787
    DOI: 10.1080/13504851.2020.1781765
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    Cited by:

    1. Jaesang Sung & Qihua Qiu & Will Davis & Rusty Tchernis, 2022. "Design and Application of an Area-Level Suicide Risk Index with Spatial Correlation," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 161(1), pages 77-104, May.

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