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An Alternative Formulation of the Esteban-Gradín-Ray Extended Measure of Polarization

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  • Ma Casilda Lasso de la Vega

    (Universidad del País Vasco)

  • Ana Marta Urrutia

    (Universidad del País Vasco)

Abstract

Measuring the extent to which distribution is polarized has recently attracted some attention from economists. Polarization, though related to inequality, is a different concept and implies a tendency towards clustering of observations into groups. It is of interest because it may be related to the generation of tensions and social unrest. In independent studies, Esteban and Ray (1994) and Wolfson (1994) conceptualized the notion of polarization and developed the corresponding measures. Since their papers, many other indices have been proposed. Particularly, in a recent paper in this journal, Grad´ın (2002) uses an extension of the Esteban and Ray measure. In this paper we point out some problems with this extended measure of polarization and explore an alternative formulation for the extension so as to solve the problem identified. An illustration of the use of these tools taking data from 22 Latin American countries shows the possibilities of this new measure and how polarization and inequality can often differ in practice.

Suggested Citation

  • Ma Casilda Lasso de la Vega & Ana Marta Urrutia, 2006. "An Alternative Formulation of the Esteban-Gradín-Ray Extended Measure of Polarization," Journal of Income Distribution, Ad libros publications inc., vol. 15(I), pages 42-54, December.
    • Handle: RePEc:jid:journl:y:2006:v:15:i:i:p:42-54
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    Cited by:

    1. 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.
    2. 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.
    3. Juan Gabriel Rodríguez, 2004. "Measuring polarization, inequality, welfare and poverty," Economic Working Papers at Centro de Estudios Andaluces E2004/75, Centro de Estudios Andaluces.
    4. Michal Brzezinski, 2013. "Income Polarization and Economic Growth," LIS Working papers 587, LIS Cross-National Data Center in Luxembourg.
    5. Wang, Jinxian & Caminada, Koen & Goudswaard, Kees & Wang, Chen, 2015. "Decomposing income polarization and tax-benefit changes across 31 European countries and Europe wide, 2004-2012," MPRA Paper 66155, University Library of Munich, Germany.
    6. FUSCO Alessio & SILBER Jacques, 2011. "Ordinal Variables and the Measurement of Polarization," LISER Working Paper Series 2011-33, Luxembourg Institute of Socio-Economic Research (LISER).
    7. 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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