Measuring Bipolarization, Inequality, Welfare and Poverty
AbstractThis paper analyzes the relationship between bipolarization and inequality, welfare and poverty measures. First, we clarify the similarities and differences between bipolarization and inequality measures. Second, it is shown that bipolarization is the difference between the welfare levels of the richer and poorer income groups when feelings of identification between individuals are based on their utility functions. In fact, bipolarization is interpreted as the welfare of the richer group that is wasted to compensate for income bipolarization. Third, a relationship between bipolarization measurement and the normalized poverty deficit index is established. These findings are applied to the polarization measures of Wolfson (1994), Esteban and Ray (1994) and Lasso de la Vega and Urrutia (2006).
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Bibliographic InfoPaper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 39.
Length: 31 pages
Date of creation: 2006
Date of revision:
bipolarization; inequality; welfare; poverty.;
Other versions of this item:
- Juan Gabriel Rodríguez, 2004. "Measuring polarization, inequality, welfare and poverty," Economic Working Papers at Centro de Estudios Andaluces E2004/75, Centro de Estudios Andaluces.
- D39 - Microeconomics - - Distribution - - - Other
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
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