On the Measurement of the Overall Degree of Income Stratification between Groups

18 Pages Posted: 5 Jun 2018

Date Written: June 2018

Abstract

This paper proposes a new class of indices that measure overall stratification between groups in a population and can be decomposed as population‐weighted averages of pairwise indices. The indices capture not only the extent to which groups form well‐defined strata in the income distribution but also the scale of the resultant differences in equally distributed equivalent incomes between them, where these two factors play the same role as identification and alienation respectively in the measurement of polarization. The properties of the class as a whole are investigated as well as those of selected members of it: zeroth and first power indices may be interpreted as measuring the overall incidence and depth of stratification respectively, while second and higher power indices members are directly sensitive to the severity of stratification between groups. An illustrative application provides an empirical analysis of global income stratification by regions in 1993.

Keywords: between‐group inequality, income stratification, polarization

JEL Classification: D31, D63

Suggested Citation

Allanson, Paul, On the Measurement of the Overall Degree of Income Stratification between Groups (June 2018). Review of Income and Wealth, Vol. 64, Issue 2, pp. 388-405, 2018. Available at SSRN: https://ssrn.com/abstract=3189541 or http://dx.doi.org/10.1111/roiw.12290

Paul Allanson (Contact Author)

University of Dundee ( email )

Dundee, Scotland DD1 4HN
United Kingdom
+44 1382 384377 (Phone)

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