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Bipolarisation measurement: A two-income approach with an application to nine Sub-Saharan African countries

Author

Listed:
  • Florent Bresson

    (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)

Abstract

This paper introduces and axiomatically characterises new classes of bipolarisation indices based on the equivalent representation of observed distributions with the help of two-income distributions. This representation makes it possible to interpret the suggested indices either as I) the representative income gap between individuals from the top part of the distribution and those from the bottom part, orii) the excess representative income share of the top part compared against its population share.The proposed bipolarisation indices show additional appealing features. First, they can handle any population partition between the p percent poorest individuals and the (1-p) richest individuals (including the popular p=50% choice). Secondly, they can be easily decomposed into spread and clustering contributions toward total bipolarisation. Finally, they relate to familiar inequality indices so that bipolarisation levels can easily be connected to the average income and inequality levels relating to each part of the income distribution. The new classes include some prominent rank-dependent bipolarisation indices from the literature as special cases, together with numerous novel proposals for both absolute and relative approaches to bipolarisation. An illustration is given using consumption data from nine Sub-Saharan African countries.
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Suggested Citation

  • Florent Bresson, 2023. "Bipolarisation measurement: A two-income approach with an application to nine Sub-Saharan African countries," Post-Print hal-04154652, HAL.
    • Handle: RePEc:hal:journl:hal-04154652
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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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