Extreme values, means, and inequality measurement

in Review of Income and Wealth (2021), 67

We examine some ordinal measures of inequality that are familiar from the literature. These measures have a quite simple structure in that their values are determined by combinations of specific summary ... [more ▼]

We examine some ordinal measures of inequality that are familiar from the literature. These measures have a quite simple structure in that their values are determined by combinations of specific summary statistics such as the extreme values and the arithmetic mean of a distribution. In spite of their common appearance, there seem to be no axiomatizations available so far, and this paper is intended to fill that gap. In particular, we consider the absolute and relative variants of the range; the max-mean and the mean-min orderings; and quantile-based measures. In addition, we provide some empirical observations that are intended to illustrate that, although these orderings are straightforward to define, some of them display a surprisingly high correlation with alternative (more complex) measures. [less ▲]

Economic inequality and subjective wellbeing across the world

in Gradín, Carlos; Leibbrandt, Murray; Tarp, Finn (Eds.) Inequality in the Developing World (2021)

We use repeated cross-section data from the Afrobarometer, Asianbarometer Latinobarometer, and Eurobarometer to analyse the variables that are correlated with current and future evaluations of standards ... [more ▼]

We use repeated cross-section data from the Afrobarometer, Asianbarometer Latinobarometer, and Eurobarometer to analyse the variables that are correlated with current and future evaluations of standards of living. We consider resource comparisons (the gap in resources between richer and poorer individuals) and the normative evaluation of distribution (conditional on these gaps), given by the Gini coefficient. The ‘typical’ pattern of a negative effect of gaps on the better-off but a positive effect of gaps on the worse-off is found only in Europe: gaps for the better-off in Africa and America have no correlation with current life evaluations and are associated with more positive expectations of the future. There is no positive estimated coefficient for gaps to the worse-off in Asia. The Gini coefficient is negatively correlated with current life evaluation only in Asia. On the contrary, future life evaluations are more positive in more unequal countries in Africa and America. [less ▲]

It's a Family Affair: Family Health Shocks and Child Well-Being

in Willems, Helmut Erich; Samuel, Robin; Vögele, Claus (Eds.) et al Well-being and health-related behavior of adolescents. Disciplinary concepts, empirical findings, international perspectives, and practical approaches (working title) (2021)

Prenatal Economic Shocks and Birth Outcomes in UK Cohort Data

in Economics and Human Biology (2021), 41

We consider the effects of major prenatal economic shocks experienced by mothers on two indicators of newborn-infant health, birth weight and head circumference, using detailed microdata from the UK ... [more ▼]

We consider the effects of major prenatal economic shocks experienced by mothers on two indicators of newborn-infant health, birth weight and head circumference, using detailed microdata from the UK ALSPAC survey. Controlling for physiological and socioeconomic factors, an economic shock in the first 18 weeks of gestation lowers birth weight by 40-70 grams and head circumference by 2-3mm. We find evidence of transmission via poorer maternal health due to absolute material deprivation and tobacco and alcohol consumption, but not for the endocrinological effects of increased psychosocial anxiety. The fragile-male hypothesis holds for birth weight but not for head circumference, as predicted by recent theories on gender differences in prenatal development. [less ▲]

Losing ground in the income hierarchy: relative deprivation revisited

in Journal of Economic Inequality (2020), 18

The paper discusses a one-parameter generalization of individual relative deprivation measures to a two-period setting that differs from earlier approaches. The parameter is, by definition, independent of ... [more ▼]

The paper discusses a one-parameter generalization of individual relative deprivation measures to a two-period setting that differs from earlier approaches. The parameter is, by definition, independent of the income distributions under consideration—it is to be chosen by a social planner. Its value has an intuitive interpretation: it represents the additional weight assigned to the income shortfalls associated with agents who passed the individual in question when moving from yesterday’s income distribution to today’s. Therefore, the choice of this parameter represents an important value judgment on the part of a social planner regarding the relative impact of being left behind. As a special case, it is illustrated how the well-known Yitzhaki index can be extended to this environment. [less ▲]

The Measurement of Resilience

in Journal of Economic Theory (2020), 189

Resilience has become an important topic in many social sciences. Numerous individual choices and economic and demographic outcomes are likely to be influenced by people’s resilience. School performance ... [more ▼]

Resilience has become an important topic in many social sciences. Numerous individual choices and economic and demographic outcomes are likely to be influenced by people’s resilience. School performance, work absenteeism and burnout, longevity, the quality of sleep and health-risk behaviors such as substance abuse are some examples. Similarly, it is of high policy relevance to understand the determinants of both individual resilience (such as educational, marital and occupational status) and ecological resilience (such as climate change). Empirical work designed to uncover such relationships suffers from the absence of a resilience measure applicable in the context of large data sets. We fill this gap by proposing a specific measure that is characterized by a set of natural properties. After an introduction to the notion of resilience and its attributes, we argue why these conditions have intuitive appeal. Finally, we provide illustrating examples and derive our main characterization result. [less ▲]

Welfare-Based Income Insecurity in the US and Germany: Evidence from Harmonized Panel Data

in Journal of Economic Behavior and Organization (2020), 176

This paper develops normative approaches for measuring individual-level income insecurity. Using concepts derived from Expected Utility Theory and Prospect Theory, we build a suite of measures designed to ... [more ▼]

This paper develops normative approaches for measuring individual-level income insecurity. Using concepts derived from Expected Utility Theory and Prospect Theory, we build a suite of measures designed to capture various facets of psychologically distressing income risk. We present an application for the US and Germany from 1993-2013, employing conditionally heteroskedastic fixed-effects models to generate predictive densities for future incomes. Our results reveal much higher levels of income risk in the US relative to Germany, which can be mostly attributed to a higher level of autonomous, time-invariant volatility. State-by-state variations in liberal/conservative political administrations partially explain our results, and we find some evidence that trade exposure is a contributing factor in the US. [less ▲]

Crime Victimisation Over Time and Sleep Quality

in SSM - Population Health (2019), 7

We here consider the relationship between the individual time profile of crime victimisation and sleep quality. Sleep quality worsens with contemporaneous crime victimisation, with physical violence ... [more ▼]

We here consider the relationship between the individual time profile of crime victimisation and sleep quality. Sleep quality worsens with contemporaneous crime victimisation, with physical violence having a larger effect than property crime. But crime history also matters, and past victimisation experience continues to reduce current sleep quality. Last, there is some evidence that the order of victimisation spells plays a role: consecutive years of crime victimisation affect sleep quality more adversely than the same number of years when not contiguous. [less ▲]

Living Conditions and Basic Needs: Evidence from African Countries

in South African Journal of Economics (2019), 87

We here use five rounds of Afrobarometer data covering more than 100,000 individuals over the 2004-2016 period to explore the link between individual self-reported measures of living conditions and access ... [more ▼]

We here use five rounds of Afrobarometer data covering more than 100,000 individuals over the 2004-2016 period to explore the link between individual self-reported measures of living conditions and access to four basic needs. We not only consider own access to these needs, but also various indices of their deprivation, satisfaction and inequality. We find some evidence of comparisons to those who are better off and to those who are worse off, in terms of access to basic needs, in the evaluation of current living conditions. Overall, however, subjective living conditions are mostly absolute in African countries. There is notable heterogeneity by level of development, with the effect of lack of access to basic needs being more pronounced in poorer countries. Equally, comparisons to the better-off are associated with better living conditions in poorer countries, suggesting the existence of a tunnel effect: this latter disappears with economic development. [less ▲]

Intertemporal material deprivation: a proposal and an application to EU countries

in Dasgupta, Indraneel; Mitra, Manipushpak (Eds.) Deprivation, Inequality and Polarization: Essays in Honour of Satya Ranjan Chakravarty (2019)

This paper analyzes the effects of the inclusion of past experiences in measuring current material deprivation. The method followed generalizes the proposal of Bossert, Ceriani, Chakravarty and D'Ambrosio ... [more ▼]

This paper analyzes the effects of the inclusion of past experiences in measuring current material deprivation. The method followed generalizes the proposal of Bossert, Ceriani, Chakravarty and D'Ambrosio (2014) by adapting the class of indices on the measurement of poverty over time of Dutta, Roope and Zank (2013). An application to the analysis of material deprivation within EU countries is then provided. Following the path of material deprivation experienced by each individual over time yields a picture which differs from that in the annual results. Since the measurement of material deprivation is used by the EU member states and the European Commission to monitor national and EU progress in the fight against poverty and social exclusion, the results suggest that time cannot be neglected. Countries should not only be compared based on their year-by-year results, but additional information is gained by following individuals over time and producing an aggregate measure once dynamic considerations are taken into consideration. [less ▲]