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How Do Income Distributions Change in Europe?

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  • Marzena Rostek

Abstract

This study explores income changes in nine European countries. First, in order to rank the distributions of income, we apply dominance criteria. Then, we extend this standard approach and examine the differences between Lorenz and Generalized Lorenz curves by means of nonparametric methods. We trace movements in relative position of particular income groups by investigating the direction and magnitude of the impact of changes in income that took place. Analysis of the inequality distributions allows us to reveal the information concealed in these curves, but not provided by the ranking. Apart from the time- and country-specific phenomena, we identify some regular, consistent across time and space patterns. To assess the consistency of our results, we employ different specifications of equivalence scales. In addition, this sensitivity analysis provides evidence of a U- and inverted J-shape pattern displayed by the value of inequality index, when the parameters of the equivalence scale are changed.

Suggested Citation

  • Marzena Rostek, 2000. "How Do Income Distributions Change in Europe?," LIS Working papers 240, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:240
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    References listed on IDEAS

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    1. Joan Esteban & Carlos Gradín & Debraj Ray, 2007. "An Extension of a Measure of Polarization, with an application to the income distribution of five OECD countries," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(1), pages 1-19, April.
    2. Timothy Smeeding & Gunther Schmaus & Brigitte Buhmann & Lee Rainwater, 1988. "Equivalence Scales, Well-Being, Inequality and Poverty: Sensitivity Estimates Across Ten Countries Using the LIS Database," LIS Working papers 17, LIS Cross-National Data Center in Luxembourg.
    3. Jean‐Yves Duclos & Magda Mercader‐Prats, 1999. "Household Needs And Poverty: With Application To Spain And The U.K," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(1), pages 77-98, March.
    4. Dowrick, Steve & Quiggin, John, 1994. "International Comparisons of Living Standards and Tastes: A Revealed-Preference Analysis," American Economic Review, American Economic Association, vol. 84(1), pages 332-341, March.
    5. Brigitte Buhmann & Lee Rainwater & Guenther Schmaus & Timothy M. Smeeding, 1988. "Equivalence Scales, Well‐Being, Inequality, And Poverty: Sensitivity Estimates Across Ten Countries Using The Luxembourg Income Study (Lis) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-142, June.
    6. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    7. Coulter, Fiona A E & Cowell, Frank A & Jenkins, Stephen P, 1992. "Equivalence Scale Relativities and the Extent of Inequality and Poverty," Economic Journal, Royal Economic Society, vol. 102(414), pages 1067-1082, September.
    8. repec:bla:revinw:v:34:y:1988:i:2:p:115-42 is not listed on IDEAS
    9. Dasgupta, Partha & Sen, Amartya & Starrett, David, 1973. "Notes on the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 6(2), pages 180-187, April.
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    Cited by:

    1. Katja H lsch, 2002. "The Effect of Social Transfers in Europe: An Empirical Analysis Using Generalized Lorenz Curves," LIS Working papers 317, LIS Cross-National Data Center in Luxembourg.

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