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Unit-consistency and polarization of income distributions

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  • Ma Casilda Lasso de la Vega

    ()
    (Department of Applied Economics, University of the Basque Country, Dep. Economía Aplicada)

  • Ana Urrutia

    ()
    (Department of Applied Economics, University of the Basque Country, Dep. Economía Aplicada)

  • Henar Diez

    (Department of Applied Economics, University of the Basque Country, Dep. Economía Aplicada)

Abstract

Most of the polarization measures proposed in the literature, and likewise the inequality and poverty indices, assume some invariance condition, be that scale, translation or intermediate, which imposes value judgements on the measurement. In the inequality and poverty fields, B. Zheng suggests rejecting these invariance conditions as axioms and proposes replacing them with the unit-consistency axiom (Economica 2007, Economic Theory 2007 and Social Choice and Welfare 2007). 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 polarization field and propose and characterize a class of intermediate polarization orderings which is unit-consistent.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2008-100.pdf
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Bibliographic Info

Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 100.

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Length: 23 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2008-100

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Keywords: Polarization Orderings; Unit-consistency;

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  1. 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.
  2. Joan-Maria Esteban & Debraj Ray, 1991. "On the Measurement of Polarization," Boston University - Institute for Economic Development 18, Boston University, Institute for Economic Development.
  3. Jean-Yves Duclos & Joan Esteban & Debraj Ray, 2003. "Polarization: Concepts, Measurement, Estimation," Working Papers 46, Barcelona Graduate School of Economics.
  4. Chakravarty, Sanya R. & Majumdar, A. & Roy, Sonali, 2007. "A Treatment of Absolute Indices of Polarization," Staff General Research Papers 12811, Iowa State University, Department of Economics.
  5. Pfingsten, Andreas, 1986. "Distributionally-neutral tax changes for different inequality concepts," Journal of Public Economics, Elsevier, vol. 30(3), pages 385-393, August.
  6. Tateo Yoshida, 2005. "Social welfare rankings of income distributions A new parametric concept of intermediate inequality," Social Choice and Welfare, Springer, vol. 24(3), pages 557-574, 06.
  7. 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.
  8. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
  9. Buhong Zheng, 2007. "Unit-Consistent Decomposable Inequality Measures," Economica, London School of Economics and Political Science, vol. 74(293), pages 97-111, 02.
  10. 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.
  11. Buhong Zheng, 2007. "Unit-Consistent Poverty Indices," Economic Theory, Springer, vol. 31(1), pages 113-142, April.
  12. Claudio Zoli, . "A Surplus Sharing Approach to the Measurement of Inequality," Discussion Papers 98/25, Department of Economics, University of York.
  13. Zhang, Siao-Bo & Kanbur, Ravi, 1999. "What Difference Do Polarization Measures Make? An Application To China," Working Papers 7224, Cornell University, Department of Applied Economics and Management.
  14. repec:ebl:ecbull:v:4:y:2007:i:36:p:1-6 is not listed on IDEAS
  15. Wang, You-Qiang & Tsui, Kai-Yuen, 2000. " Polarization Orderings and New Classes of Polarization Indices," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(3), pages 349-63.
  16. Chakravarty, Satya R & Majumder, Amita, 2001. "Inequality, Polarisation and Welfare: Theory and Applications," Australian Economic Papers, Wiley Blackwell, vol. 40(1), pages 1-13, March.
  17. Wolfson, Michael C, 1997. "Divergent Inequalities: Theory and Empirical Results," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 43(4), pages 401-21, December.
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Cited by:
  1. Fabio Clementi & Francesco Schettino, 2013. "Income polarization in Brazil, 2001-2011: A distributional analysis using PNAD data," Economics Bulletin, AccessEcon, vol. 33(3), pages 1796-1815.
  2. 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.
  3. Gaston Yalonetzky, 2014. "Relative bipolarization Lorenz curve," Economics Bulletin, AccessEcon, vol. 34(2), pages 1103-1113.
  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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