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Polarization, growth and social policy in the case of Israel, 1997-2008

Author

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  • García-Fernández, Rosa María
  • Gottlieb, Daniel
  • Palacios-González, Frederico

Abstract

In this paper we study income polarization by first comparing the efficiency of two statistical models to identify the number of poles in the income distribution empirically. The statistical models used are a multi-resolution analysis (MRA) and a log-normal approach (LNA). We then apply the methodology to Israeli income data over the years 1997-2008 in order to empirically detect the number of income classes as sub-populations of incomes concentrated around an optimally determined number of poles. After that we compute polarization using a multiplicative normalized polarization measure, developed by Palacios-González and García-Fernández (An Intra-Group Variance Based Polarization Measure, 2010), which consists of three interacting components based on well-known axioms of Esteban and Ray (Extensions of a Measure of Polarization OCDE Countries, 1994). Finally we study the causes of the obtained polarization results in a multinomial logit analysis.

Suggested Citation

  • García-Fernández, Rosa María & Gottlieb, Daniel & Palacios-González, Frederico, 2013. "Polarization, growth and social policy in the case of Israel, 1997-2008," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 7, pages 1-40.
  • Handle: RePEc:zbw:ifweej:201315
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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2013-15
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    References listed on IDEAS

    as
    1. Paapaa, Richard & van Dijk, Herman K., 1998. "Distribution and mobility of wealth of nations," European Economic Review, Elsevier, vol. 42(7), pages 1269-1293, July.
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    4. Gottlieb, Daniel, 2000. "Globalization and World financial Turmoil - A Test for Israel's Economic Policy," MPRA Paper 3150, University Library of Munich, Germany.
    5. 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.
    6. Palacios-Gonzalez, Federico & Garcia-Fernandez, Rosa, 2009. "A Multiresolution Analysis of Income Polarization," European Journal of Economic and Social Systems, Lavoisier, pages 119-142.
    7. Duangkamon Chotikapanich & William E Griffiths, 2008. "Estimating Income Distributions Using a Mixture of Gamma Densities," Department of Economics - Working Papers Series 1034, The University of Melbourne.
    8. Jenkins, Stephen P., 1995. "Did the middle class shrink during the 1980s? UK evidence from kernel density estimates," Economics Letters, Elsevier, vol. 49(4), pages 407-413, October.
    9. Anthony B. Atkinson & Andrea Brandolini, 2011. "On the identification of the “middle class”," Working Papers 217, ECINEQ, Society for the Study of Economic Inequality.
    10. Gottlieb, Daniel & Kushnir, Leonid, 2009. "Social policy targeting and binary information transfer between surveys," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 3, pages 1-16.
    11. Jacques SILBER & Meital Hanoka & Joseph Deutsch, 2007. "On the Link Between the Concepts of Kurtosis and Bipolarization," Economics Bulletin, AccessEcon, vol. 4(36), pages 1-6.
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    13. 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.
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    Cited by:

    1. Tuyen, Tran Quang, 2014. "The Impact Of Farmland Loss On Income Distribution Of Households In Hanoi'S Peri-Urban Areas, Vietnam," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 55(2), pages 189-206, December.
    2. Louis Chauvel, 2014. "The Intensity and Shape of Inequality: The ABG Method of Distributional Analysis," LIS Working papers 609, LIS Cross-National Data Center in Luxembourg.

    More about this item

    Keywords

    polarization; poverty; multiresolution analysis; income distribution;

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J1 - Labor and Demographic Economics - - Demographic Economics
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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