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Econometrics 2018, 6(2), 17; https://doi.org/10.3390/econometrics6020017

On the Decomposition of the Esteban and Ray Index by Income Sources

1
Facultad de Ciencias Económicas y Empresariales, Universidad de Málaga, Calle Ejido 6, Málaga 29071, Spain
2
Department of Economics, Bar-Ilan University, 52900 Ramat-Gan, Israel
3
LISER, Esch-sur-Alzette L-4366, Luxembourg
4
Centro Camilo Dagum, Tuscan Interuniversity Centre, Advanced Statistics for Equitable and Sustainable Development, Università di Pisa, Dipartimento di Economia e Management, Pisa 56124, Italy
*
Author to whom correspondence should be addressed.
Received: 18 January 2018 / Revised: 22 February 2018 / Accepted: 11 March 2018 / Published: 26 March 2018
(This article belongs to the Special Issue Econometrics and Income Inequality)
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Abstract

This paper proposes a simple algorithm based on a matrix formulation to compute the Esteban and Ray (ER) polarization index. It then shows how the algorithm introduced leads to quite a simple decomposition of polarization by income sources. Such a breakdown was not available hitherto. The decomposition we propose will thus allow one to determine the sign, as well as the magnitude, of the impact of the various income sources on the ER polarization index. A simple empirical illustration based on EU data is provided. View Full-Text
Keywords: decomposition; Esteban and Ray polarization index; income sources; polarization decomposition; Esteban and Ray polarization index; income sources; polarization
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).
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Bárcena-Martín, E.; Silber, J. On the Decomposition of the Esteban and Ray Index by Income Sources. Econometrics 2018, 6, 17.

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