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The BIP Trilogy (bipolarization, inequality and polarization): One saga but three different stories

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  • Deutsch, Joseph
  • Fusco, Alessio
  • Silber, Jacques

Abstract

Inequality, bi-polarization and polarization are related but distinct concepts aiming at analysing the income distribution. This paper first recalls the main differences between these three notions of inequality, bipolarization and polarization and then suggests using the so-called Shapley decomposition to show that the various income sources have a different impact on these three types of indicators. Our empirical investigation, based on 2008 data for Luxembourg, shows in fact that, in the case of the so-called zero income Shapley decomposition, inequality in Luxembourg is strongly related to income from capital while bi-polarization is mainly due to the distribution of income from work and polarization to that of the income from work and transfers. --

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File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2013-22
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Bibliographic Info

Article provided by Kiel Institute for the World Economy in its journal Economics: The Open-Access, Open-Assessment E-Journal.

Volume (Year): 7 (2013)
Issue (Month): 22 ()
Pages: 1-33

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Handle: RePEc:zbw:ifweej:201322

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Keywords: bi-polarization; income sources; inequality; Luxembourg; polarization; Shapley decomposition procedure;

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  1. Olivier Bargain & Tim Callan, 2007. "Analysing the Effects of Tax-benefit Reforms on Income Distribution: A decomposition Approach," Papers, Economic and Social Research Institute (ESRI) WP197, Economic and Social Research Institute (ESRI).
  2. repec:ebl:ecbull:v:4:y:2007:i:36:p:1-6 is not listed on IDEAS
  3. Francesco Devicienti, 2008. "Shapley-Value Decompositions of Changes in Wage Distributions: A Note," LABORatorio R. Revelli Working Papers Series 80, LABORatorio R. Revelli, Centre for Employment Studies.
  4. Frédéric CHANTREUIL & Alain TRANNOY, 2011. "Inequality Decomposition Values," Annales d'Economie et de Statistique, ENSAE, issue 101-102, pages 13-36.
  5. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth of Mexican Americans," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
  6. Satya R. Chakravarty & Conchita D'Ambrosio, 2010. "Polarization Orderings Of Income Distributions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(1), pages 47-64, 03.
  7. Bénédicte H. Apouey, 2010. "On Measuring And Explaining Socioeconomic Polarization In Health With An Application To French Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(1), pages 141-170, 03.
  8. Abdelkrim Araar, 2008. "On the Decomposition of Polarization Indices: Illustrations with Chinese and Nigerian Household Surveys," Cahiers de recherche, CIRPEE 0806, CIRPEE.
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