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A Polarization Index for Overlapping Groups

Author

Listed:
  • Chiara Gigliarano
  • Daniel Nowak
  • Karl Mosler

Abstract

The well‐known index of income bipolarization proposed by Wolfson (1994) requires two groups to be split according to the median income and, therefore, to be non‐overlapping. The aim of this paper is to propose a new polarization index in the spirit of the Wolfson index. It allows for any possible partition of the population in two or more (also overlapping) groups. The new index maintains the simplicity and immediate comprehension of the Wolfson index, though being much more flexible. An application is then provided for German and Italian income data.

Suggested Citation

  • 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.
    • Handle: RePEc:bla:revinw:v:65:y:2019:i:4:p:712-735
    DOI: 10.1111/roiw.12374
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    References listed on IDEAS

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    1. Ravallion, Martin & Chen, Shaohua, 2022. "Fleshing out the olive? Observations on income polarization in China since 1981," China Economic Review, Elsevier, vol. 76(C).

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