Bipolarisation measurement: A two-income approach with an application to nine Sub-Saharan African countries

Florent Bresson, Marek Kosny and Gaston Yalonetzky

No 653, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper introduces and axiomatically characterises new classes of bipolarisation indices based on the equivalent representation of observed distributions with the help of two-income distributions. This representation makes it possible to interpret the suggested indices either as I) the representative income gap between individuals from the top part of the distribution and those from the bottom part, orii) the excess representative income share of the top part compared against its population share.The proposed bipolarisation indices show additional appealing features. First, they can handle any population partition between the p percent poorest individuals and the (1-p) richest individuals (including the popular p=50% choice). Secondly, they can be easily decomposed into spread and clustering contributions toward total bipolarisation. Finally, they relate to familiar inequality indices so that bipolarisation levels can easily be connected to the average income and inequality levels relating to each part of the income distribution. The new classes include some prominent rank-dependent bipolarisation indices from the literature as special cases, together with numerous novel proposals for both absolute and relative approaches to bipolarisation. An illustration is given using consumption data from nine Sub-Saharan African countries.

Keywords: Bipolarisation; inequality; two-income distribution (search for similar items in EconPapers)
JEL-codes: D31 D63 O15 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2023-08
New Economics Papers: this item is included in nep-afr and nep-dev
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Bipolarisation measurement: A two-income approach with an application to nine Sub-Saharan African countries (2023)
Working Paper: Bipolarisation measurement: A two-income approach with an application to nine Sub-Saharan African countries (2023)
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