The median as watershed
This paper is concerned with concepts - poverty, inequality, affluence, and polarization - that are typically treated in different literatures. Our aim here is to place them within a common framework and to identify the way in which different classes of income transfers contribute to different objectives. In particular, we examine the role of transfers that preserve both the mean and the median, and the importance of distinguishing between transfers across the median and transfers on one side of the median. The aim of the paper is to bring out some of the implications of adopting the median as a dividing line for these measurement purposes, particularly with respect to the robustness of the conclusions reached. In doing so, we develop the two alternative approaches - primal and dual - applied to Lorenz curves in Aaberge (2001). Our focus is on "well-off" countries where poverty is a minority, rather than a majority, phenomenon. At the other end of the scale, rich people are found in all countries, but less attention has been paid to the definition of cut-offs for affluence. The measurement of "affluence" can proceed along similar lines to the measurement of poverty. The threshold may be set, relatively, as a percentage of the median, and we can ask similar questions about the sensitivity and seek similar dominance results. Moreover, we focus on societies that have a middle class in the sense that the median person is never defined as "rich". The motivation of Foster and Wolfson's paper "Polarization and the decline of the middle class" (1992/2010) was the sensitivity of conclusions to the - essentially arbitrary - definition of the middle class. They proposed "a range-free approach to measuring the middle class and polarization based on partial orderings" (2010, page 247). We introduce an alternative partial ordering defined in terms of a bi-polarization curve capturing the distance from the median.
|Date of creation:||Aug 2013|
|Date of revision:|
|Contact details of provider:|| Postal: P.O.Box 8131 Dep, N-0033 Oslo, Norway|
Phone: (+47) 21 09 00 00
Fax: +47 - 62 88 55 95
Web page: http://www.ssb.no/en/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Donaldson, David & Weymark, John A., 1980. "A single-parameter generalization of the Gini indices of inequality," Journal of Economic Theory, Elsevier, vol. 22(1), pages 67-86, February.
- Joan-Maria Esteban & Debraj Ray, 1991.
"On the Measurement of Polarization,"
Boston University - Institute for Economic Development
18, Boston University, Institute for Economic Development.
- 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).
- Esteban, J. & Ray, D., 1993. "On the Measurement of Polarization," UFAE and IAE Working Papers 221.93, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Rolf Aaberge, 2000.
"Ranking Intersecting Lorenz Curves,"
271, Statistics Norway, Research Department.
- Rolf Aaberge, 2004. "Ranking Intersecting Lorenz Curves," CEIS Research Paper 45, Tor Vergata University, CEIS.
- Aaberge, Rolf, 2008. "Ranking Intersecting Lorenz Curves," IZA Discussion Papers 3852, Institute for the Study of Labor (IZA).
- Rolf Aaberge, 2000. "Ranking intersectiong Lorenz Curves," ICER Working Papers 08-2000, ICER - International Centre for Economic Research.
- Aaberge, Rolf, 2001. "Axiomatic Characterization of the Gini Coefficient and Lorenz Curve Orderings," Journal of Economic Theory, Elsevier, vol. 101(1), pages 115-132, November.
- Jean-Yves Duclos & Joan-Maria Esteban & Debraj Ray, 2003.
"Polarization: Concepts, Measurement, Estimation,"
46, Barcelona Graduate School of Economics.
- Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
- Rolf Aaberge, 2000. "Characterizations of Lorenz curves and income distributions," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 17(4), pages 639-653.
- Yaari, Menahem E, 1987. "The Dual Theory of Choice under Risk," Econometrica, Econometric Society, vol. 55(1), pages 95-115, January.
- Esteban, Joan & Ray, Debraj, 1999. "Conflict and Distribution," Journal of Economic Theory, Elsevier, vol. 87(2), pages 379-415, August.
- Rolf Aaberge & Magne Mogstad, 2010.
"On the measurement of long-term income inequality and income mobility,"
622, Statistics Norway, Research Department.
- Rolf Aaberge & Magne Mogstad, 2010. "On the measurement of long-term income inequality and income mobility," Working Papers 156, ECINEQ, Society for the Study of Economic Inequality.
- Rolf Aaberge & Magne Mogstad, 2009. "On the Measurement of Long-Term Income Inequality and Income Mobility," ICER Working Papers 09-2009, ICER - International Centre for Economic Research.
- Aaberge, Rolf & Mogstad, Magne, 2010. "On the Measurement of Long-Term Income Inequality and Income Mobility," IZA Discussion Papers 4699, Institute for the Study of Labor (IZA).
- Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-31, March.
- Atkinson, A B, 1987. "On the Measurement of Poverty," Econometrica, Econometric Society, vol. 55(4), pages 749-64, July.
- Michael Sattinger (ed.), 2001. "Income Distribution," Books, Edward Elgar Publishing, volume 0, number 2018, June.
- Shorrocks, Anthony F, 1995. "Revisiting the Sen Poverty Index," Econometrica, Econometric Society, vol. 63(5), pages 1225-30, September.
- Bossert, Walter & Schworm, William, 2007.
"A Class of Two-Group Polarization Measures,"
Cahiers de recherche
2007-09, Universite de Montreal, Departement de sciences economiques.
- Walter Bossert & William Schworm, 2007. "A Class of Two-Group Polarization Measures," Discussion Papers 2007-34, School of Economics, The University of New South Wales.
- BOSSERT, Walter & SCHWORM, William, 2007. "A Class of Two-Group Polarization Measures," Cahiers de recherche 10-2007, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Sen, Pranab Kumar, 1988. "The harmonic Gini coefficient and affluence indexes," Mathematical Social Sciences, Elsevier, vol. 16(1), pages 65-76, August.
- Jullien Bruno & Green Jerry G, 1988.
"Ordinal independence in non-linear utility theory,"
CEPREMAP Working Papers (Couverture Orange)
- Garfinkel, Michelle R. & Skaperdas, Stergios (ed.), 2012. "The Oxford Handbook of the Economics of Peace and Conflict," OUP Catalogue, Oxford University Press, number 9780195392777, December.
- Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-58, May.
- Andreas Peichl & Thilo Schaefer & Christoph Scheicher, 2010.
"Measuring Richness And Poverty: A Micro Data Application To Europe And Germany,"
Review of Income and Wealth,
International Association for Research in Income and Wealth, vol. 56(3), pages 597-619, 09.
- Peichl, Andreas & Schaefer, Thilo & Scheicher, Christoph, 2008. "Measuring Richness and Poverty: A Micro Data Application to Europe and Germany," IZA Discussion Papers 3790, Institute for the Study of Labor (IZA).
- Michal Brzezinski, 2010. "Income Affluence in Poland," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 99(2), pages 285-299, November.
- Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
When requesting a correction, please mention this item's handle: RePEc:ssb:dispap:749. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (L MaasÃ¸)
If references are entirely missing, you can add them using this form.