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Interindividual deprivation, close and remote individuals

Luis José Imedio Olmedo, Elena Barcena () and Encarnación M. Parrado Gallardo
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Luis José Imedio Olmedo: Dpto. Estadística y Econometría, University of Málaga.
Encarnación M. Parrado Gallardo: Dpto. Estadística y Econometría, University of Málaga.

No 13/08, ThE Papers from Department of Economic Theory and Economic History of the University of Granada.

Abstract: In assessing relative deprivation, the classical approach considers that individuals compare their income with each and every income of the distribution, and assign equal weight to these comparisons. In this paper we propose a more realistic alternative approach to obtain individual deprivation. We assume that the deprivation of the individual depends, to a greater extent, on the situation of those who are part of their social environment (neighbors, colleagues, family, or, in general, the individual’s reference group) rather than on the situation of those in an unattainable situation from the individual’s point of view. In developing their aspirations, individuals focus on the group to which they belong or at least, they feel they are likely to belong to. As a particular case, our proposal includes the classical approach, allowing us to explain some situations that do not fall under the assumptions of that approach.

Keywords: Inequality; inter-individual comparisons; reference groups; weighting functions. (search for similar items in EconPapers)
JEL-codes: C10 D31 I38 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2013-09-05
New Economics Papers: this item is included in nep-hpe
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