polar.aff | R Documentation |
Computes the Wolfson polarization index.
polar.aff(x, weight)
x |
the income vector |
weight |
vector of weights |
Standard inequality measures do not give any information about polarization. A more polarized income distribution is one that has relatively fewer middle income class and more low- and/or high-income households (Alichi et al. 2016). Low income class is very often identified with poverty and high-income class with richness. One of the measures of polarization is the Wolfson polarization index (Wolfson 1994). Weighted version of this index is given by:
P_w= 2 \left( 2T-G_w \right) \frac{\mu_w}{\rho_w},
where T
is the difference between 0.5 and the income share of bottom half of the population, G_w
is the Gini coefficient,
\mu_w
is the mean income, \rho_w
is the median income.
Pw |
the value of index |
TT |
the difference between 0.5 and the income share of bottom half of the population |
Alicja Wolny-Dominiak, Anna Saczewska-Piotrowska
1. Alichi A., Kantenga K., Sole J. (2016) Income polarization in the United States. IMF Working Paper, WP/16/121.
2. Wolfson M.C. (1994) When inequalities diverge, The American Economic Review, 84, pp. 353-358.
data(affluence)
polar.aff(affluence$income, weight = NULL)
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