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A new approach to measuring and studying the characteristics of class membership: The progress of poverty, inequality and polarization of income classes in urban China

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  • Gordon Anderson
  • Alessio Farcomeni
  • Grazia Pittau
  • Roberto Zelli

Abstract

Classifying agents into subgroups in order to measure the plight of the "poor", "middle class" or "rich" is common place in economics, unfortunately the definition of class boundaries is contentious and beset with problems. Here a technique based on mixture models is proposed for surmounting these problems by determining the number of classes in a population and estimating the probability that an agent belongs to a particular class. All of the familiar statistics for describing the classes remain available and the possibility of studying the determinants of class membership is raised. As a substantive illustration we analyze household income in Urban China in the last decade of the 20th Century. Four income groups are classified and the progress of those "poor", "lower middle", "upper middle" and "rich" classes are related to household and regional characteristics to study the impact of urbanization and the one child policy on class membership over the period.

Suggested Citation

  • Gordon Anderson & Alessio Farcomeni & Grazia Pittau & Roberto Zelli, 2014. "A new approach to measuring and studying the characteristics of class membership: The progress of poverty, inequality and polarization of income classes in urban China," Working Papers tecipa-521, University of Toronto, Department of Economics.
    • Handle: RePEc:tor:tecipa:tecipa-521
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    Cited by:

    1. Gordon Anderson & Maria Grazia Pittau & Roberto Zelli & Jasmin Thomas, 2018. "Income Inequality, Cohesiveness and Commonality in the Euro Area: A Semi-Parametric Boundary-Free Analysis," Econometrics, MDPI, vol. 6(2), pages 1-20, March.
    2. Gordon Anderson & Thomas Fruehauf & Maria Grazia Pittau & Roberto Zelli, 2015. "Evaluating Progress Toward an Equal Opportunity Goal: Assessing the German Educational Reforms of the First Decade of the 21st Century," Working Papers tecipa-552, University of Toronto, Department of Economics.
    3. Maitra, Sudeshna, 2016. "The poor get poorer: Tracking relative poverty in India using a durables-based mixture model," Journal of Development Economics, Elsevier, vol. 119(C), pages 110-120.

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    More about this item

    Keywords

    Poverty Frontiers; Mixture Models; Class membership; Urban China.;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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