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Unit Consistency And Bipolarization Of Income Distributions

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  • Ma Casilda Lasso de la Vega
  • Ana Urrutia
  • Henar Díez

Abstract

Many polarization measures proposed in the literature assume some invariance condition. Clearly, each invariance condition imposes a specific value judgment on polarization measurement. In inequality and poverty measurement, B. Zheng suggests rejecting these invariance conditions as axioms, and proposes replacing them with the unit‐consistency axiom. 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 bipolarization field. We introduce a new family of Krtscha‐type intermediate bipolarization indices, and also propose and characterize a class of intermediate polarization orderings which are unit‐consistent. Finally, a short empirical application using data from Spain is also provided to illustrate how the bipolarization orderings proposed may be used in practice.

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  • Ma Casilda Lasso de la Vega & Ana Urrutia & Henar Díez, 2010. "Unit Consistency And Bipolarization Of Income Distributions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(1), pages 65-83, March.
    • Handle: RePEc:bla:revinw:v:56:y:2010:i:1:p:65-83
    DOI: 10.1111/j.1475-4991.2009.00363.x
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    Cited by:

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    2. Gaston Yalonetzky, 2017. "The Benchmark of Maximum Relative Bipolarisation," Research on Economic Inequality, in: Research on Economic Inequality, volume 25, pages 39-50, Emerald Group Publishing Limited.
    3. 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.
    4. F. Clementi & A. L. Dabalen & V. Molini & F. Schettino, 2017. "When the Centre Cannot Hold: Patterns of Polarization in Nigeria," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 608-632, December.
    5. Marek Kosny & Gaston Yalonetzky, 2016. "Relative p-bipolarisation measurement with generalised means and hybrid Lorenz curves," Working Papers 404, ECINEQ, Society for the Study of Economic Inequality.
    6. 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.
    7. Chiara Gigliarano & Daniel Nowak & Karl Mosler, 2019. "A Polarization Index for Overlapping Groups," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(4), pages 712-735, December.
    8. Mariateresa Ciommi & Chiara Gigliarano & Giovanni Maria Giorgi, 2019. "Bonferroni And De Vergottini Are Back: New Subgroup Decompositions And Bipolarization Measures," Working Papers 439, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    9. Mauro Mussini & Biancamaria Zavanella, 2015. "Measuring bipolarization in labour productivity in Italy: a new index and its decomposition by sectors and regional factors," RIVISTA DI ECONOMIA E STATISTICA DEL TERRITORIO, FrancoAngeli Editore, vol. 2015(3), pages 29-55.
    10. Gaston Yalonetzky, 2014. "Relative bipolarization Lorenz curve," Economics Bulletin, AccessEcon, vol. 34(2), pages 1103-1113.
    11. Tomasz Panek & Jan Zwierzchowski, 2020. "Median Relative Partial Income Polarization Indices: Investigating Economic Polarization in Poland During the Years 2005–2015," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(3), pages 1025-1044, June.
    12. Gaston Yalonetzky, 2017. "The Necessary Requirement of Median Independence for Relative Bipolarisation Measurement," Research on Economic Inequality, in: Research on Economic Inequality, volume 25, pages 51-62, Emerald Group Publishing Limited.
    13. Chiara Gigliarano & Pietro Muliere, 2012. "Measuring Income Polarization Using an Enlarged Middle Class," Working Papers 271, ECINEQ, Society for the Study of Economic Inequality.
    14. Satya Chakravarty & Bhargav Maharaj, 2012. "Ethnic polarization orderings and indices," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 7(1), pages 99-123, May.

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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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