An extension of a measure of polarization, with an application to the income distribution of five OECD countries

Abstract

We introduce an extension of the Esteban and Ray [Econometrica, 62:819-851 1994] measure of polarization that can be applied to density functions. As a by-product we also derive the Wolfson [Am. Econ. Rev., 84:353-358 1994] measure as a special case. This derivation has the virtue of casting both measures in the context of a (statistically) unified framework. We study the polarization of the distribution of household income for five OECD countries (LIS database): US, UK, Canada, Germany and Sweden. © Springer Science+Business Media B.V. 2006.