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The BIP trilogy (bipolarization, inequality and polarization): One saga but three different stories

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  • Deutsch, Joseph
  • Fusco, Alessio
  • Silber, Jacques

Abstract

Inequality, bi-polarization and polarization are related but distinct concepts aiming at analysing the income distribution. This paper first recalls the main differences between these three notions of inequality, bipolarization and polarization. It then shows that a close look at the impact of various income sources on these three types of indicators confirms that indeed they measure three different features of an income distribution. The effect of the different income components on inequality, bipolarization and polarization is analyzed via what is known as the Shapley de-composition and the empirical illustration is based on 2008 data for Luxembourg.

Suggested Citation

  • Deutsch, Joseph & Fusco, Alessio & Silber, Jacques, 2012. "The BIP trilogy (bipolarization, inequality and polarization): One saga but three different stories," Economics Discussion Papers 2012-49, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwedp:201249
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    References listed on IDEAS

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    1. Olivier Bargain & Tim Callan, 2010. "Analysing the effects of tax-benefit reforms on income distribution: a decomposition approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(1), pages 1-21, March.
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    3. Bénédicte H. Apouey, 2010. "On Measuring And Explaining Socioeconomic Polarization In Health With An Application To French Data," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(1), pages 141-170, March.
    4. F. Chantreuil & A. Trannoy, 1999. "Inequality decomposition values : the trade-off between marginality and consistency," THEMA Working Papers 99-24, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    5. Abdelkrim Araar, 2008. "On the Decomposition of Polarization Indices: Illustrations with Chinese and Nigerian Household Surveys," Cahiers de recherche 0806, CIRPEE.
    6. repec:adr:anecst:y:2011:i:101-102:p:02 is not listed on IDEAS
    7. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth of Mexican Americans," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    8. Francesco Devicienti, 2010. "Shapley-value decompositions of changes in wage distributions: a note," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 8(1), pages 35-45, March.
    9. Satya R. Chakravarty & Conchita D'Ambrosio, 2010. "Polarization Orderings Of Income Distributions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(1), pages 47-64, March.
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    Citations

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    Cited by:

    1. Marco Ranaldi, 2016. "On the Measurement of Functional Income Distribution," Documents de travail du Centre d'Economie de la Sorbonne 16051rr, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne, revised Feb 2018.
    2. Clementi, Fabio & Molini, Vasco & Schettino, Francesco, 2018. "All that Glitters is not Gold: Polarization Amid Poverty Reduction in Ghana," World Development, Elsevier, vol. 102(C), pages 275-291.
    3. Wang, Jinxian & Caminada, Koen & Goudswaard, Kees & Wang, Chen, 2015. "Decomposing income polarization and tax-benefit changes across 31 European countries and Europe wide, 2004-2012," MPRA Paper 66155, University Library of Munich, Germany.
    4. repec:exl:29stat:v:17:y:2016:i:2:p:221-236 is not listed on IDEAS
    5. Mauro Mussini, 2016. "On Measuring Income Polarization: An Approach Based On Regression Trees," Statistics in Transition new series, Główny Urząd Statystyczny (Polska), vol. 17(2), pages 221-236, June.
    6. Wang, Chen & Wan, Guanghua, 2015. "Income polarization in China: Trends and changes," China Economic Review, Elsevier, vol. 36(C), pages 58-72.
    7. Alessio Fusco & Jacques Silber, 2014. "On social polarization and ordinal variables: the case of self-assessed health," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(8), pages 841-851, November.

    More about this item

    Keywords

    bi-polarization; income sources; inequality; Luxembourg; polarization; Shapley decomposition procedure;

    JEL classification:

    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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