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Measuring polarization, inequality, welfare and poverty

This paper analyzes the relationship between polarization and inequality, welfare and poverty measures. First, the Wolfson polarization measure is generalized in terms of the between-groups and within-groups Gini components for income groups separated by any z income value. Second, it is shown that polarization is the difference between the welfare levels of rich and poor income groups when feelings of identification between individuals are based on their utility functions. Third, the proposed polarization measure is a function of the Sen poverty index, its extension due to Shorrocks (1995) and the normalized poverty deficit index when the z income value represents the poverty line. In addition, these results are linked to the Esteban and Ray (1994) and Esteban et al. (1999) polarization measures.

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Paper provided by Centro de Estudios Andaluces in its series Economic Working Papers at Centro de Estudios Andaluces with number E2004/75.

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Length: 33 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:cea:doctra:e2004_75
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  1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  2. Duclos, Jean-Yves & Esteban, Joan & Ray, Debraj, 2003. "Polarization: Concepts, Measurement, Estimation," Cahiers de recherche 0301, CIRPEE.
  3. 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.
  4. Newbery, David, 1970. "A theorem on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 264-266, September.
  5. Conchita D'Ambrosio & Edward N. Wolff, 2001. "Is Wealth Becoming More Polarized in the United States?," Macroeconomics 0106006, EconWPA.
  6. Hey, John D & Lambert, Peter J, 1980. "Relative Deprivation and the Gini Coefficient: Comment," The Quarterly Journal of Economics, MIT Press, vol. 95(3), pages 567-73, November.
  7. Cowell, Frank A, 1980. "On the Structure of Additive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 47(3), pages 521-31, April.
  8. Juan Prieto-Rodríguez & Juan Gabriel Rodríguez & Rafael Salas, . "Interactions Inequality-Polarization: Characterization Results(*)," Working Papers 15-05 Classification-JEL , Instituto de Estudios Fiscales.
  9. Joan-Maria Esteban & Debraj Ray, 1991. "On the Measurement of Polarization," Boston University - Institute for Economic Development 18, Boston University, Institute for Economic Development.
  10. Ravallion, Martin & Chen, Shaohua, 1997. "What Can New Survey Data Tell Us about Recent Changes in Distribution and Poverty?," World Bank Economic Review, World Bank Group, vol. 11(2), pages 357-82, May.
  11. Sheshinski, Eytan, 1972. "Relation between a social welfare function and the gini index of income inequality," Journal of Economic Theory, Elsevier, vol. 4(1), pages 98-100, February.
  12. Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-27, September.
  13. 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.
  14. Jean-Yves Duclos & Damien Echevin, 2003. "Bi-Polarization Comparisons," Cahiers de recherche 0341, CIRPEE.
  15. Juan G. Rodríguez & Rafael Salas, . "Extended Bi-Polarization And Inequality Measures," Working Papers 10-03 Classification-JEL , Instituto de Estudios Fiscales.
  16. 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.
  17. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
  18. 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.
  19. Yitzhaki, Shlomo, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, MIT Press, vol. 93(2), pages 321-24, May.
  20. 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.
  21. 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, Journal of Income Distribution, vol. 15(I), pages 42-54, December.
  22. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June.
  23. 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.
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