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The measurement of income mobility: A partial ordering approach

Author

Listed:
  • Tapan Mitra

    (Department of Economics, Cornell University, Ithaca, NY 14853, USA)

  • Efe A. Ok

    (Department of Economics, New York University, 269 Mercer St., New York, NY 10003, USA)

Abstract

Given a set of longitudinal data pertaining to two populations, a question of interest is the following: Which population has experienced a greater extent of income mobility? The aim of the present paper is to develop a systematic way of answering this question. We first put forth four axioms for income movement-mobility indices, and show that a familiar class of measures is characterized by these axioms. An unambiguous (partial) ordering is then defined as the intersection of the (complete) orderings induced by the mobility measures which belong to the characterized class; a transformation of income distributions is "more mobile" than another if, and only if, the former is ranked higher than the latter for all mobility measures which satisfy our axioms. Unfortunately, our mobility ordering depends on a parameter, and therefore, it is not readily apparent how one can apply it to panel data directly. In the second part of the paper, therefore, we derive several sets of parameter-free necessary and sufficient conditions which allow one to use the proposed mobility ordering in making unambiguous income mobility comparisons in practice.

Suggested Citation

  • Tapan Mitra & Efe A. Ok, 1998. "The measurement of income mobility: A partial ordering approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(1), pages 77-102.
    • Handle: RePEc:spr:joecth:v:12:y:1998:i:1:p:77-102
    Note: Received: July 12, 1995; revised version: May 13, 1997
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    Citations

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    Cited by:

    1. Robert Aebi & Klaus Neusser & Peter Steiner, 2004. "Equilibrium Mobility," Diskussionsschriften dp0408, Universitaet Bern, Departement Volkswirtschaft.
    2. Luis Ayala & Mercedes Sastre, 2008. "The structure of income mobility: empirical evidence from five UE countries," Empirical Economics, Springer, vol. 35(3), pages 451-473, November.
    3. D'Agostino, Marcello & Dardanoni, Valentino, 2009. "The measurement of rank mobility," Journal of Economic Theory, Elsevier, vol. 144(4), pages 1783-1803, July.
    4. Satya R. Chakravarty & Nachiketa Chattopadhyay & Nora Lustig & Rodrigo Aranda, 2020. "Measuring Directional Mobility: The Bartholomew and Prais-Bibby Indices Reconsidered," Research on Economic Inequality, in: Inequality, Redistribution and Mobility, volume 28, pages 75-96, Emerald Group Publishing Limited.
    5. Yoram Amiel & Michele Bernasconi & Frank Cowell & Valentino Dardanoni, 2015. "Do we value mobility?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(2), pages 231-255, February.
    6. Markus Jäntti & Stephen P. Jenkins, 2013. "Income Mobility," SOEPpapers on Multidisciplinary Panel Data Research 607, DIW Berlin, The German Socio-Economic Panel (SOEP).
    7. Ian Brand-Weiner & Francesca Francavilla, 2015. "Income mobility in times of economic growth: The case of Viet Nam," OECD Development Centre Working Papers 328, OECD Publishing.
    8. Tom Van Puyenbroeck, 2008. "Proportional Representation, Gini Coefficients, and the Principle of Transfers," Journal of Theoretical Politics, , vol. 20(4), pages 498-526, October.
    9. Higgins, Sean & Lustig, Nora, 2016. "Can a poverty-reducing and progressive tax and transfer system hurt the poor?," Journal of Development Economics, Elsevier, vol. 122(C), pages 63-75.
    10. Robert Aebi & Klaus Neusser & Peter Steiner, 2006. "A Large Deviation Approach to the Measurement of Mobility," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 142(II), pages 195-222, June.
    11. Satya R. Chakravarty & Nachiketa Chattopadhyay & Conchita D'Ambrosio, 2016. "On a Family of Achievement and Shortfall Inequality Indices," Health Economics, John Wiley & Sons, Ltd., vol. 25(12), pages 1503-1513, December.
    12. Thomas Demuynck & Dirk Van de gaer, 2012. "Inequality Adjusted Income Growth," Economica, London School of Economics and Political Science, vol. 79(316), pages 747-765, October.
    13. Roberto Ghiselli Ricci, 2019. "An axiomatic characterization of a class of rank mobility measures," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 52(4), pages 753-785, April.
    14. Sean Higgins & Nora Lustig, 2015. "Can Poverty-Reducing and Progressive Tax and Transfer System Hurt the Poor?," Commitment to Equity (CEQ) Working Paper Series 1333, Tulane University, Department of Economics.
    15. Van Kerm, Philippe, 2006. "Comparisons of income mobility profiles," ISER Working Paper Series 2006-36, Institute for Social and Economic Research.
    16. Yélé Maweki Batana & Jean-Yves Duclos, 2010. "Testing for Mobility Dominance," Cahiers de recherche 1002, CIRPEE.
    17. Joachim Jarreau, 2015. "The Impact of Naturalizations on Job Mobility and Wages: Evidence from France," AMSE Working Papers 1508, Aix-Marseille School of Economics, France.
    18. Marcello D’Agostino & Valentino Dardanoni, 2009. "What’s so special about Euclidean distance?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(2), pages 211-233, August.
    19. Chattopadhyay, Nachiketa & Sengupta, Debasis, 2020. "Individual, Structural and Exchange Mobility: Decomposition and Axiom based measures," SocArXiv 8m46u, Center for Open Science.
    20. C. Schluter & D. Van De Gaer, 2008. "Structural Mobility, Exchange Mobility and Subgroup Consistent Mobility Measurement – US–German Mobility Measurements Revisited," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 08/543, Ghent University, Faculty of Economics and Business Administration.
    21. Marcelo Cortes Neri & Nanak Kakwani, 2016. "On Measuring Social Tensions: With Applications To Brazil," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 220, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    22. Marat Ibragimov & Rustam Ibragimov, 2007. "Market Demand Elasticity and Income Inequality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(3), pages 579-587, September.
    23. Danny Ben‐Shahar & Eyal Sulganik, 2008. "Partial Ordering of Unpredictable Mobility with Welfare Implications," Economica, London School of Economics and Political Science, vol. 75(299), pages 592-604, August.

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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