What Difference Do Polarisation Measures Make? An Application to China

TLDR

Recent discussions distinguish inequality from polarisation, with literature suggesting polarisation captures distributional changes missed by inequality measures. The study investigates whether new polarisation measures yield different results over time, focusing on China, and explores an alternative approach tailored to China’s policy concerns. The authors analyze China’s recent inequality and polarisation trends to compare standard inequality metrics with newly proposed polarisation measures. The study finds that the new polarisation measures produce results similar to standard inequality metrics, contrary to theoretical expectations. Keywords: Inequality, Distributional Change, Standard Measures, China.

Abstract

Abstract In recent years there has been much discussion of the difference between inequality and polarisation. The vast literature on inequality is held to miss out key features of distributional change, which are better described as changes in polarisation. Axioms have been proposed which capture some of these differences, and measures of polarisation, as distinct from inequality, have been suggested. The theoretical distinctions proposed in this literature are indeed interesting. But do the newly proposed measures of polarisation give different results in comparing societies over time? We address these questions for China, where dramatic increases in inequality and polarisation have been much discussed in the literature. We find that, contrary to theoretical expectation, the new measures of polarisation do not generate very different results from the standard measures of inequality. The paper ends by considering a different approach to polarisation which might better conform to the policy concerns expressed in the specific context of China. Keywords: InequalityDistributional ChangeStandard MeasuresChin