The Journal of Economic Inequality

, Volume 5, Issue 1, pp 1–19 | Cite as

An Extension of a Measure of Polarization, with an application to the income distribution of five OECD countries

  • Joan Esteban
  • Carlos Gradín
  • Debraj Ray


We introduce an extension of the Esteban and Ray [Econometrica, 62:819–851 1994] measure of polarization that can be applied to density functions. As a by-product we also derive the Wolfson [Am. Econ. Rev., 84:353–358 1994] measure as a special case. This derivation has the virtue of casting both measures in the context of a (statistically) unified framework. We study the polarization of the distribution of household income for five OECD countries (LIS database): US, UK, Canada, Germany and Sweden.

Key words

income distribution inequality polarization 

JEL classification

D31 D63 I32 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. 1.
    Anderson, G.: Toward an empirical analysis of polarization. J. Econ. 122, 1–26 (2004)Google Scholar
  2. 2.
    Anderson, G.: “Polarization”, mimeo, Department of Economics, University of Toronto (2005)Google Scholar
  3. 3.
    Aghevli, B.B., Mehran, F.: Optimal grouping of income distribution data. J. Am. Stat. Assoc. 76, 22–26 (1981)CrossRefGoogle Scholar
  4. 4.
    Chakravarty, S., Majumder, A.: Inequality, polarization and welfare: Theory and applications. Aust. Econ. Papers 40, 1–13 (2001)CrossRefGoogle Scholar
  5. 5.
    Chakravarty, S., Majumder, A., Roy, S.: A treatment of absolute indices of polarization. Mimeo, forthcoming in The Japanese Economic Review (2002)Google Scholar
  6. 6.
    Davies, J.B., Shorrocks, A.F.: Optimal grouping of income and wealth data. J. Econ. 42, 97–108 (1989)Google Scholar
  7. 7.
    Duclos, J-Y., Esteban, J., Ray, D.: Polarization: Concepts, measurement, estimation. Econometrica 72, 1737–1772 (2004), reprinted in Christopher Barrett (ed.) The Social Economics of Poverty: On Identities, Groups, Communities, and Networks. Routledge, London (2005)CrossRefGoogle Scholar
  8. 8.
    Esteban, J., Ray, D.: On the measurement of polarization. Econometrica 62, 819–851 (1994)CrossRefGoogle Scholar
  9. 9.
    Esteban, J., Gradín, C., Ray, D.: Extensions of a Measure of Polarization, with an Application to the Income Distributions of Five OECD Countries. Working Paper 24, Instituto de Estudios Económicos de Galicia-P. Barrié de la Maza, A Coruña, Spain. Also in: Luxembourg Income Study (LIS) Working Paper Series, 218, Maxwell School of Citizenship and Public Affairs, Syracuse University, Syracuse, New York (1999)Google Scholar
  10. 10.
    Gradín, C.: Polarization by sub-populations in Spain, 1973–91. Rev. Income Wealth 46(4), 457–474 (2000)CrossRefGoogle Scholar
  11. 11.
    Love, R., Wolfson, M.C.: Income Inequality: Statistical Methodology and Canadian Illustrations, Catalogue 13–559 Occasional. Ottawa, Statistics Canada (1976)Google Scholar
  12. 12.
    Montalvo, J., Reynal-Querol, M.: Ethnic polarization, potential conflict, and civil wars. Am. Econ. Rev. 95, 796–816 (2005)CrossRefGoogle Scholar
  13. 13.
    Reynal-Querol, M.: Ethnicity, political systems, and civil wars. J. Confl. Resolut. 46, 29–54 (2002)CrossRefGoogle Scholar
  14. 14.
    Salas, R., Rodríguez, J.G.: Extended bi-polarization and inequality measures. Res. Econ. Inequal. 9, 69–83 (2002)Google Scholar
  15. 15.
    Wang, Y., Tsui, K.: Polarization orderings and new classes of polarization indices. J. Public Econ. Theory 2(3), 349–363 (2000)CrossRefGoogle Scholar
  16. 16.
    Wolfson, M.C.: When inequalities diverge. Am. Econ. Rev. 84, Papers and Proceedings, 353–358 (1994)Google Scholar
  17. 17.
    Zhang, X., Kanbur, R.: What difference do polarization measures make? An application to China. J. Dev. Stud. 37(3), 85–98 (2001)CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2006

Authors and Affiliations

  1. 1.Institut d’Analisi Económica, CSICBarcelonaSpain
  2. 2.Universidade de VigoVigoSpain
  3. 3.New York UniversityNew YorkUSA

Personalised recommendations