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Measuring Richness and Poverty: A Micro Data Application to Europe and Germany

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Author Info
Peichl, Andreas () (IZA)
Schaefer, Thilo () (University of Cologne)
Scheicher, Christoph () (University of Cologne)

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Abstract

In this paper, we define a new class of richness measures. In contrast to the often used headcount, these new measures are sensitive to changes in rich persons' income and therefore allow for a more sophisticated analysis of richness. We demonstrate the application of these new measures to analyze the development of poverty and richness over time in Germany, to compare Germany to many other European countries and to investigate the impact of tax reforms on poverty and richness. Using these examples, we show the importance of taking into account the intensity of changes and not only the number of people beyond a given richness line (headcount). We propose to use the new measures in addition to the headcount index for a more comprehensive analysis of richness.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3790.

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Length: 32 pages
Date of creation: Oct 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3790

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Related research
Keywords: richness; affluence; poverty; tax reform; flat tax;

Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
I32 - Health, Education, and Welfare - - Welfare and Poverty - - - Measurement and Analysis of Poverty

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Atkinson, A. B., 1997. "Measurement of Trends in Poverty and the Income Distribution," Cambridge Working Papers in Economics 9712, Faculty of Economics, University of Cambridge.
  2. Fabien Dell, 2005. "Top Incomes in Germany and Switzerland Over the Twentieth Century," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 412-421, 04/05. [Downloadable!] (restricted)
  3. Schaefer, Thilo & Peichl, Andreas, 2007. "Documentation FiFoSiM: Integrated tax benefit microsimulation," FiFo-CPE Discussion Papers - Finanzwissenschaftliche Diskussionsbeiträge 06-10 [rev.], University of Cologne, CPE - Cologne Center for Public Economics. [Downloadable!]
  4. Atkinson, Tony, et al, 2002. "Microsimulation of Social Policy in the European Union: Case Study of a European Minimum Pension," Economica, London School of Economics and Political Science, vol. 69(274), pages 229-43, May. [Downloadable!] (restricted)
  5. Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June. [Downloadable!]
  6. Kevin Kim & Ricardo Varsano & Michael Keen, 2006. "The "Flat Tax(es)": Principles and Evidence," IMF Working Papers 06/218, International Monetary Fund. [Downloadable!]
  7. Emmanuel Saez, 2005. "Top Incomes in the United States and Canada Over the Twentieth Century," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 402-411, 04/05. [Downloadable!] (restricted)
  8. Thomas Piketty & Emmanuel Saez, 2006. "The Evolution of Top Incomes: A Historical and International Perspective," American Economic Review, American Economic Association, vol. 96(2), pages 200-205, May. [Downloadable!]
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  9. Anthony B. Atkinson, 2005. "Comparing the Distribution of Top Incomes Across Countries," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 393-401, 04/05. [Downloadable!] (restricted)
  10. Chakravarty, Satya R., 1983. "A new index of poverty," Mathematical Social Sciences, Elsevier, vol. 6(3), pages 307-313, December. [Downloadable!] (restricted)
  11. Thomas Piketty, 2005. "Top Income Shares in the Long Run: An Overview," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 382-392, 04/05. [Downloadable!] (restricted)
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