IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Making Inferences About Rich Country - Poor Country Convergence: The Polarization Trapezoid and Overlap measures

  • Gordon Anderson
  • Teng Wah Leo
  • Oliver Linton

Underlying the unresolved debate over whether the gap between rich and poor country GNP per capita has narrowed is a concern for wellbeing. The issue is really about the changing shapes of distributions of wellbeing indicators. As limiting cases con- vergence between rich and poor country groups can be brought about by countries within groups becoming less alike without any diminution of growth rate differentials between them or it can be brought about by reductions in these differentials without any diminution of within group identity. In essence the debate is about the extent to which rich and poor countries are polarizing, a subject first theoretically explored by Esteban and Ray (1994). The empirical issue is about whether separate groups can be identified in the overall distribution and whether they are tending toward common or distinct equilibria. This paper proposes two simple statistics for the problem, the Overlap measure and the Trapezoidal measure, changes in which reflect a combination of increasing (decreasing) subgroup location differences and decreasing (increasing) subgroup spreads which are the characteristics of polarization (convergence). The former statistic is of use when the sub-distributions are identified, while the latter can be used whether or not the subgroups are identified. These techniques are applied to the examination of convergence in GDP per capita between rich and poor nations when growth is viewed either as a wellbeing index or a technology index (i.e. the data are, or are not, population weighted). It turns out that such a distinction matters, viewed technologically there is divergence, viewed in a wellbeing sense there is convergence. As a collection of countries Africa is diverging from the rest of the world whatever the perspective of growth.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.economics.utoronto.ca/public/workingPapers/tecipa-387.pdf
File Function: Main Text
Download Restriction: no

Paper provided by University of Toronto, Department of Economics in its series Working Papers with number tecipa-387.

as
in new window

Length: 27 pages
Date of creation: 14 Jan 2010
Date of revision:
Handle: RePEc:tor:tecipa:tecipa-387
Contact details of provider: Postal: 150 St. George Street, Toronto, Ontario
Phone: (416) 978-5283

References listed on IDEAS
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.:

as in new window
  1. Joan-Maria Esteban & Debraj Ray, 1991. "On the Measurement of Polarization," Boston University - Institute for Economic Development 18, Boston University, Institute for Economic Development.
  2. Xavier Sala-i-Martin, 2006. "The World Distribution of Income: Falling Poverty and ... Convergence, Period," The Quarterly Journal of Economics, MIT Press, vol. 121(2), pages 351-397, May.
  3. Sudhir Anand & Paul Segal, 2008. "What Do We Know about Global Income Inequality?," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 57-94, March.
  4. DECANCK, Koen & DECOSTER, André & SCHOOKAERT, Erik, . "The evolution of world inequality in well-being," CORE Discussion Papers RP -2140, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  5. Charles I. Jones, 1997. "On the Evolution of the World Income Distribution," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 19-36, Summer.
  6. Johnson, Paul, 1999. "A Nonparametric Analysis of Income Convergence Across the US States," Vassar College Department of Economics Working Paper Series 46, Vassar College Department of Economics.
  7. Bianchi, Marco, 1997. "Testing for Convergence: Evidence from Non-parametric Multimodality Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(4), pages 393-409, July-Aug..
  8. Paapaa, Richard & van Dijk, Herman K., 1998. "Distribution and mobility of wealth of nations," European Economic Review, Elsevier, vol. 42(7), pages 1269-1293, July.
  9. Nazrul Islam, 2003. "What have We Learnt from the Convergence Debate?," Journal of Economic Surveys, Wiley Blackwell, vol. 17(3), pages 309-362, 07.
  10. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
  11. Duclos, Jean-Yves & Esteban, Joan & Ray, Debraj, 2003. "Polarization: Concepts, Measurement, Estimation," Cahiers de recherche 0301, CIRPEE.
  12. Gordon Anderson & Oliver Linton & Yoon-Jae Whang, 2009. "Nonparametric Estimation of a Polarization Measure," Cowles Foundation Discussion Papers 1714, Cowles Foundation for Research in Economics, Yale University.
  13. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
  14. Paul Beaudry & Fabrice Collard & David A. Green, 2005. "Changes in the World Distribution of Output Per Worker, 1960-1998: How a Standard Decomposition Tells an Unorthodox Story," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 741-753, November.
  15. Roberto Zelli & Maria Grazia Pittau, 2006. "Empirical evidence of income dynamics across EU regions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(5), pages 605-628.
  16. 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.
  17. Quah, Danny T, 1997. " Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," Journal of Economic Growth, Springer, vol. 2(1), pages 27-59, March.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:tor:tecipa:tecipa-387. 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: (RePEc Maintainer)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.