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Measuring Social Unrest Based on Income Distribution

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Abstract

This paper* develops a social unrest measure by revising Esteban-Ray (1994, Econometrica) polarization index. For the purpose of measuring more effectively the level of social unrest that is generated by separation of income classes, the new index allows for asymmetry between the rich and the poor groups’ alienation feeling against the other, and it constructs a more effective group identification function. To facilitate statistical inferences, asymptotic distribution of the proposed measure is also derived using results from U-statistics, and an easy-to-implement jackknife-based variance estimation algorithm is obtained. Since the new index is general enough to include the Esteban-Ray index and the Gini index for group data as special cases, the asymptotic results can be readily applied to these popular indices. Evidence based on the Panel Study of Income Dynamics data suggests that the level of social unrest has generally increased over the sample period of 1981-2005, particular since the late 1990’s, and the increase is statistically significant.

Suggested Citation

  • Yoonseok Lee & Donggyun Shin, 2013. "Measuring Social Unrest Based on Income Distribution," Center for Policy Research Working Papers 160, Center for Policy Research, Maxwell School, Syracuse University.
    • Handle: RePEc:max:cprwps:160
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    File URL: https://surface.syr.edu/cpr/384/
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    1. Joan Esteban & Carlos Gradín & Debraj Ray, 2007. "An Extension of a Measure of Polarization, with an application to the income distribution of five OECD countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 1-19, April.
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    Cited by:

    1. Ghosh, Saibal, 2023. "Social unrest and corporate behaviour during the Arab Spring period," The Journal of Economic Asymmetries, Elsevier, vol. 27(C).

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    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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