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Relative affluence measures and an identification of growth pattern

Marek Kosny ()
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Marek Kosny: Institute of Applied Mathematics, Wroclaw University of Economics

No 230, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: The analysis of growth patterns is a branch of research of great practical importance: the identification of factors that influence changes in the income distribution making them pro-poor or pro-rich can be a crucial element in the process of designing a social policy. It seems natural that analyzing the problem of the relative situation of the poorer with respect to the richer involves – for a given definition of the poorer and the richer – a comparison of the situation of both groups. It is not, however, exactly reflected in actual methodologies aiming at identifying growth patterns. The paper is aimed at proposing a method of identification of a growth pattern by analyzing the direct relation between income (or some other measure of wealth) of the poorer and of the richer. At this end the basic idea of Zenga’s inequality index is applied. Proposed relative affluence measures allude to the intuitive concept of the proportion of two averages: upper and lower – with respect to a given quantile of the income distribution. In this sense it directly refers to the relation poorer-richer and can be intuitively understood, even by non-specialists. In this paper relative affluence measures are applied to the analysis of growth patterns in Poland and the focus is on situation of the poor. The proposed measures can nevertheless be also applied to the analysis of the relative situation of the rich. In such a case the proposed measures would be measures of relative affluence in the full sense of these words.

Keywords: growth pattern; income distribution; pro-poor growth; relative affluence (search for similar items in EconPapers)
JEL-codes: J31 C46 (search for similar items in EconPapers)
Date: 2011
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