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Measuring Richness And Poverty: A Micro Data Application To Europe And Germany

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  • Andreas Peichl
  • Thilo Schaefer
  • Christoph Scheicher

Abstract

In this paper, we define a new class of richness measures. In contrast to the often used headcount, these new measures are sensitive to changes in rich individuals' incomes and, therefore, allow for a more sophisticated analysis of richness. We demonstrate the application of these new measures in analyzing the development of poverty and richness over time in Germany. Moreover, we compare Germany to many other European countries and investigate the impact of tax reforms on poverty and richness. Using these examples, we show the importance of taking the intensity of changes into account and not only the number of people beyond a given richness line (headcount). We propose to use the new measures in addition to the headcount index for a more comprehensive analysis of richness.

Suggested Citation

  • Andreas Peichl & Thilo Schaefer & Christoph Scheicher, 2010. "Measuring Richness And Poverty: A Micro Data Application To Europe And Germany," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(3), pages 597-619, September.
    • Handle: RePEc:bla:revinw:v:56:y:2010:i:3:p:597-619
    DOI: 10.1111/j.1475-4991.2010.00404.x
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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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