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Multidimensional polarization for ordinal data

  • Martyna Kobus

    ()

    (Institute of Economics, Polish Academy of Sciences)

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    Western governments increasingly place more emphasis on non-income dimensions in measuring national well-being (e.g. the UK, France). Not only averages, but the characteristics of the whole distribution (e.g. inequalities) are taken into consideration. Commonly used data such as life satisfaction, declared health status or level of education, however, are ordinal in nature and the fundamental problem of measuring inequality with ordinal variables exists. Here, a class of multidimensional inequality indices for ordinal data is characterized by inequality axioms and based on the characterization theorem an inequality measure is proposed. The method ensures that the index is also attribute decomposable, that is, we can estimate the contribution to overall inequality from inequality in dimensions and from their association. It was found for the period 1972-2010 in the US, excluding 1985 that inequality in perceived happiness contributed more to overall inequality than health inequality. Joint inequality in health and happiness was significantly higher in the first half of the study period (0.3 vs. 0.2). In the 1970s and 1980s most healthy people were also happier and this positive association increased inequality by around 20 percent. This trend was reversed in the late 1980s when the contribution of association became negative. This trend for the healthiest to no longer be the happiest persisted with the exception of three years.

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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2014-326.pdf
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    Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 326.

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    Length: 22 pages
    Date of creation: Mar 2014
    Date of revision:
    Handle: RePEc:inq:inqwps:ecineq2014-326
    Contact details of provider: Web page: http://www.ecineq.orgEmail:


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    1. Oswald, A.J., 1997. "Happiness and Economic Performance," Papers 18, Centre for Economic Performance & Institute of Economics.
    2. Thibault Gajdos & John A. Weymark, 2003. "Multidimensional generalized Gini indices," ICER Working Papers - Applied Mathematics Series 16-2003, ICER - International Centre for Economic Research.
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    10. Daniel Kahneman & Alan B. Krueger, 2006. "Developments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 3-24, Winter.
    11. Ramses H. Abul Naga & Tarik Yalcin, 2007. "Inequality measurement for ordered response health data," LSE Research Online Documents on Economics 6538, London School of Economics and Political Science, LSE Library.
    12. Meng, Xin & Miller, Paul, 1995. "Occupational Segregation and Its Impact on Gender Wage Discrimination in China's Rural Industrial Sector," Oxford Economic Papers, Oxford University Press, vol. 47(1), pages 136-55, January.
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    14. Rafael Di Tella & Robert MacCulloch, 2006. "Some Uses of Happiness Data in Economics," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 25-46, Winter.
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