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On the Decomposition of Polarization Indices: Illustrations with Chinese and Nigerian Household Surveys

  • Abdelkrim Araar

This paper explores the link between polarization and inequality and proposes some analytical methods to decompose the Duclos, Esteban, and Ray (2004) polarization index by population groups or income sources. In some cases, the decomposition methods were extend to the Esteban and Ray (1994) one. The main aim of these decomposition methods is to extend the interpretation derived from polarization indices to that of contribution components. Results drawn from Chinese data conclude that even if inequality has increased sharply during the last two decades, the pure polarization component was remained constant or even decreased on average. On the other hand, results from the 2004 Nigerian survey conclude that the population is spatially polarized, and this, based on geo-ecological zones. Furthermore, the two income sources, namely, Employment income and Non farm business income, significantly contribute to total polarization.

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Paper provided by CIRPEE in its series Cahiers de recherche with number 0806.

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Date of creation: 2008
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Handle: RePEc:lvl:lacicr:0806
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  1. 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.
  2. Esteban, J.M. & Ray, D., 1992. "On the Measurement of Polarization," UFAE and IAE Working Papers 171.92, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
  3. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
  4. Yitzhaki, Shlomo, 1979. "Relative Deprivation and the Gini Coefficient," The Quarterly Journal of Economics, MIT Press, vol. 93(2), pages 321-24, May.
  5. Abdelkrim Araar & Awoyemi Taiwo Timothy, 2006. "Poverty and Inequality Nexus: Illustrations with Nigerian Data," Cahiers de recherche 0638, CIRPEE.
  6. Dagum, Camilo, 1997. "A New Approach to the Decomposition of the Gini Income Inequality Ratio," Empirical Economics, Springer, vol. 22(4), pages 515-31.
  7. 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.
  8. Jean-Yves Duclos & Joan Esteban & Debraj Ray, 2004. "Polarization: Concepts, Measurement, Estimation," Econometrica, Econometric Society, vol. 72(6), pages 1737-1772, November.
  9. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-55, June.
  10. repec:ebl:ecbull:v:28:y:2006:i:15:p:a0 is not listed on IDEAS
  11. Abdelkrim Araar, 2006. "On the Decomposition of the Gini Coefficient: an Exact Approach, with an Illustration Using Cameroonian Data," Cahiers de recherche 0602, CIRPEE.
  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. James Foster & Michael Wolfson, 2010. "Polarization and the decline of the middle class: Canada and the U.S," Journal of Economic Inequality, Springer, vol. 8(2), pages 247-273, June.
  14. repec:ebl:ecbull:v:3:y:2003:i:19:p:1-16 is not listed on IDEAS
  15. Dwayne Benjamin & Loren Brandt & John Giles & Sangui Wang, 2005. "Income Inequality During China's Economic Transition," Working Papers tecipa-238, University of Toronto, Department of Economics.
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