Measuring Income Polarization Using an Enlarged Middle Class
AbstractIn this paper, a new class of polarization measures is derived axiomatically. The concept of polarization is here identified with the decline of the middle class. In particular, we extend the definition of middle class towards a more realistic framework: the middle class is defined in terms of central interval rather than median income. Then polarization is measured both as the presence of well-separated poles and as the dispersion inside the middle class. This new class of indices can be seen as a generalization of existing measures of income polarization. Also, a new polarization ordering is introduced. The new approach is illustrated with an application to EU countries.
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Bibliographic InfoPaper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 271.
Length: 32 pages
Date of creation: Oct 2012
Date of revision:
axioms; transfers; polarization measurement; income distribution.;
Find related papers by JEL classification:
- C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-11-17 (All new papers)
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