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A Class of Two-Group Polarization Measures

  • WALTER BOSSERT
  • WILLIAM SCHWORM

The phenomenon of income polarization is generally associated with a disappearing middle class but there does not seem to be a generally accepted definition of this notion. We characterize classes of polarization quasi-orderings and polarization measures in a framework where there are two income groups separated by the median. The axioms we employ are variants of within-group clustering and between-group spread properties, and an independence property. Furthermore, we illustrate that attempts to extend the axioms to more general settings severely restrict their appeal and conclude that alternative approaches may be required to capture concepts involving polarization. Copyright © 2008 Wiley Periodicals, Inc..

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9779.2008.00401.x
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Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 10 (2008)
Issue (Month): 6 (December)
Pages: 1169-1187

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Handle: RePEc:bla:jpbect:v:10:y:2008:i:6:p:1169-1187
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  1. Gradin, Carlos, 2000. "Polarization by Sub-populations in Spain, 1973-91," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(4), pages 457-74, December.
  2. Seshanna, Shubhasree & Decornez, Stephane, 2003. "Income polarization and inequality across countries: an empirical study," Journal of Policy Modeling, Elsevier, vol. 25(4), pages 335-358, June.
  3. D'Ambrosio, Conchita, 2001. "Household Characteristics and the Distribution of Income in Italy: An Application of Social Distance Measures," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 47(1), pages 43-64, March.
  4. Esteban, J. & Ray, D., 1993. "On the Measurement of Polarization," UFAE and IAE Working Papers 221.93, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  5. 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.
  6. Christian Schultz, 1996. "Polarization and Inefficient Policies," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 331-344.
  7. Jean-Yves Duclos & Joan Esteban & Debraj Ray, 2004. "Polarization: Concepts, Measurement, Estimation," Econometrica, Econometric Society, vol. 72(6), pages 1737-1772, November.
  8. Ravallion, Martin & Shaohua Chen, 1996. "What can new survey data tell us about recent changes in distribution and poverty?," Policy Research Working Paper Series 1694, The World Bank.
  9. Shorrocks, Anthony F, 1983. "Ranking Income Distributions," Economica, London School of Economics and Political Science, vol. 50(197), pages 3-17, February.
  10. 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.
  11. X. Zhang & R. Kanbur, 2001. "What Difference Do Polarisation Measures Make? An Application to China," Journal of Development Studies, Taylor & Francis Journals, vol. 37(3), pages 85-98.
  12. 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.
  13. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
  14. Joan Esteban & Carlos Gradín & Debraj Ray, 2007. "An Extension of a Measure of Polarization, with an application to the income distribution of five OECD countries," Journal of Economic Inequality, Springer, vol. 5(1), pages 1-19, April.
  15. Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
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