On the Measurement of Functional Income Distribution

Marco Ranaldi ()
Additional contact information
Marco Ranaldi: Centre d'Economie de la Sorbonne et Paris School of Economics, https://sites.google.com/view/marcoranaldi

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: The present work proposes a framework for the analysis of inequality in income composition. Hinging on the recent work by Ranaldi (2017), we here propose a metric of income-factor polarization, the Income-Factor Polarization Index If, that captures the extent to which two income sources, notably profits and wages, are polarized across the distribution of income. We measure income-factor polarization as the distance between the Polarization Curve of Income Source and the Zero-polarization Curve, suitably normalized. The former is the cumulative distribution of income source across the population with individuals being indexed by their income rank, and the latter is the benchmark of zero inequality in income composition, defined as the situation in which each individual has the same population share of profits and wages (Ranaldi, 2017). The greater the distance, the higher the polarization. We show that the index narrows down to a single one the two conditions for the rising share of capital income to increase overall income Gini introduced by Milanovic (2017), which is : If > 0. The methodology is finally illustrated via an empirical application on the case of Italy

Keywords: Income Composition Inequality; Income Distribution; Inequality; Polarization; Statistical Methodology (search for similar items in EconPapers)
JEL-codes: C43 E25 (search for similar items in EconPapers)
Date: 2016-07, Revised 2018-02
New Economics Papers: this item is included in nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:16051rr

Access Statistics for this paper

More papers in Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne Contact information at EDIRC.
Bibliographic data for series maintained by Lucie Label ().