On the Decomposition of the Esteban and Ray Index by Income Sources
- Resource Type
- Zeitschriftenartikel
journal article
- Authors
- Bárcena-Martín, Elena; Silber, Jacques
- Source
- Econometrics, 6, 2, 1-9
- Subject
- Sozialwissenschaften, Soziologie
Social sciences, sociology, anthropology
EU-SILC
decomposition
Esteban and Ray polarization index
income sources
Einkommenspolitik, Lohnpolitik, Tarifpolitik, Vermögenspolitik
Income Policy, Property Policy, Wage Policy
Polarisierung
Einkommen
Algorithmus
EU
polarization
income
algorithm
- Language
- ISSN
- 2225-1146
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.