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1 – 9 of 9Relative bipolarisation indices are usually constructed making sure that they achieve their minimum value of bipolarisation if and only if distributions are perfectly egalitarian…
Abstract
Relative bipolarisation indices are usually constructed making sure that they achieve their minimum value of bipolarisation if and only if distributions are perfectly egalitarian. However, the literature has neglected discussing the existence of a benchmark of maximum relative bipolarisation. Consequently there is no discussion as to the implications of maximum bipolarisation for the optimal normalisation of relative bipolarisation indices either. In this note we characterize the situation of maximum relative bipolarisation as the only one consistent with the key axioms of relative bipolarisation. We illustrate the usefulness of incorporating the concept of maximum relative bipolarisation in the design of bipolarisation indices by identifying, among the family of rank-dependent Wang–Tsui indices, the only subclass fulfilling a normalisation axiom that takes into account both benchmarks of minimum and maximum relative bipolarisation.
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The relative bipolarisation literature features examples of indices which depend on the median of the distribution, including the renowned Foster–Wolfson index. This study shows…
Abstract
The relative bipolarisation literature features examples of indices which depend on the median of the distribution, including the renowned Foster–Wolfson index. This study shows that the use of the median in the design and computation of relative bipolarisation indices is both unnecessary and problematic. It is unnecessary because we can rely on existing well-behaved, median-independent indices. It is problematic because, as the study shows, median-dependent indices violate the basic transfer axioms of bipolarisation (defining spread and clustering properties), except when the median is unaffected by the transfers. The convenience of discarding the median from index computations is further illustrated with a numerical example in which median-independent indices rank distributions according to the basic transfer axioms while median-dependent indices do not.
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In the wake of the Stiglitz Commission, we assess German economic well-being by considering income, wealth and consumption. A decomposition approach is used to test for…
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In the wake of the Stiglitz Commission, we assess German economic well-being by considering income, wealth and consumption. A decomposition approach is used to test for corresponding inequality differences of these well-being dimensions. Total inequality is decomposed into within- and between-group inequality (via a normalised coefficient of variation). The decompositions are categorised into those that refer to socio-demographic characteristics (place of residence, age, household type) and those belonging to different well-being (sub-)categories (potential and net income, expenditure and wealth categories). The empirical analyses are performed for Germany using the 2008 German Sample Survey of Income and Expenditure. By decomposing German well-being inequality in great detail, we shed light on its dimensions. Our analyses illustrate that it is necessary to consider all well-being dimensions to make statements about the material well-being of private households or individuals.
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Oded Stark, Grzegorz Kosiorowski and Marcin Jakubek
A transfer from a richer individual to a poorer one seems to be the most intuitive and straightforward way of reducing income inequality in a society. However, can such a transfer…
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A transfer from a richer individual to a poorer one seems to be the most intuitive and straightforward way of reducing income inequality in a society. However, can such a transfer reduce the welfare of the society? We show that a rich-to-poor transfer can induce a response in the individuals’ behaviors which actually exacerbates, rather than reduces, income inequality as measured by the Gini index. We use this result as an input in assessing the social welfare consequence of the transfer. Measuring social welfare by Sen’s social welfare function, we show that the transfer reduces social welfare. These two results are possible even for individuals whose utility functions are relatively simple (namely, at most quadratic in all terms) and incorporate a distaste for low relative income. We first present the two results for a population of two individuals. We subsequently provide several generalizations. We show that our argument holds for a population of any size, and that the choice of utility functions which trigger this response is not singular – the results obtain for an open set of the space of admissible utility functions. In addition, we show that a rich-to-poor transfer can exacerbate inequality when we employ Lorenz-domination, and that it can decrease social welfare when we draw on any increasing, Schur-concave welfare function.
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This paper examines associations of mass media and information and communications technologies (ICTs) with inequality and poverty. It has been found that newspaper circulation has…
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This paper examines associations of mass media and information and communications technologies (ICTs) with inequality and poverty. It has been found that newspaper circulation has a robust negative association with inequality. Radios and TVs also have a negative association with poverty. ICT expenditures (as a percentage of GDP) have a negative association with poverty. An ICT index is constructed which also has a negative association with poverty. An instrumental variable analysis confirms the robust negative association between newspaper circulation and inequality.
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Global imbalances and financial crisis discussed in the preceding chapters were not the only contemporary issues that shaped the current and future landscape of the world economy…
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Global imbalances and financial crisis discussed in the preceding chapters were not the only contemporary issues that shaped the current and future landscape of the world economy. Since 2004, many countries also felt a significant shock prompted by a surge in the oil price, forcing them to look for the appropriate policy response that would produce least pain and minimum impact on welfare. The fact that oil remains an important source of energy for many countries, developed and developing alike, a price surge can trigger a new round of global conflicts. Indeed, from the hording of grain in Neolithic times to rivalry over resources in the interimperial wars of the 16th–19th centuries that laid the groundwork for World War I, and to modern nations warring over oil, competition and the desire to have a control over the possession of critical sources of vital materials had always been at the center of conflicts from the very beginning of human story. To prop up their industrialization, for a long period of time developed countries had relied on a stable supply of oil, making their political and strategic relations with oil-producing countries so critical, yet fragile and crisis prone. Conflicts and wars over oil were fought among the oil-producing countries as well.1 Although it was not admitted by the U.S. administration, at least not publicly, the desire to have greater control over oil was also the primary reason for the 2003 U.S. invasion of Iraq.
Benson Honig and Christian Hopp
In this chapter, we examine two theorized approaches to entrepreneurial activity: experiential versus prediction based strategies. We empirically assess the comparative…
Abstract
In this chapter, we examine two theorized approaches to entrepreneurial activity: experiential versus prediction based strategies. We empirically assess the comparative performance of several commonly recommended approaches – researching customer needs, researching the competitive landscape, writing a business plan, conceptually adapting the business plan or experimentally adapting the primary business activity. We found that the majority of nascent entrepreneurs began with a business plan, but only about a third adapted their plan in later stages. We also found that talking with customers and examining the competitive landscape were normative activities. Those who started a plan were more likely to create a venture, although the effects much stronger for those who changed their plan later on, as well as for those who researched customer needs.
Our results show that the selection of these activities is both ubiquitous and driven by pre-start-up experience and new venture characteristics. The activities themselves do not robustly link with successful new venture foundation. Hence, pre-start-up experiences, venture characteristics, and the institutional environment are more important in explaining successful performance than recommended activities. Implications for research, practice, and pedagogy are discussed.
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