Measuring Bipolarization, Inequality, Welfare and Poverty

Juan Rodríguez

No 39, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper analyzes the relationship between bipolarization and inequality, welfare and poverty measures. First, we clarify the similarities and differences between bipolarization and inequality measures. Second, it is shown that bipolarization is the difference between the welfare levels of the richer and poorer income groups when feelings of identification between individuals are based on their utility functions. In fact, bipolarization is interpreted as the welfare of the richer group that is wasted to compensate for income bipolarization. Third, a relationship between bipolarization measurement and the normalized poverty deficit index is established. These findings are applied to the polarization measures of Wolfson (1994), Esteban and Ray (1994) and Lasso de la Vega and Urrutia (2006).

Keywords: bipolarization; inequality; welfare; poverty. (search for similar items in EconPapers)
JEL-codes: D39 D63 H30 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2006
New Economics Papers: this item is included in nep-pbe
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Related works:
Working Paper: Measuring polarization, inequality, welfare and poverty (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2006-39

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