WHAT DIFFERENCE DO POLARIZATION MEASURES MAKE? AN APPLICATION TO CHINA

WP 1999-02 January 1999In recent years there has been much discussion of the difference between Inequality and Polarization. The vast literature on inequality is held to miss out key features of distribution change, which are better described as changes in the polarization. Axioms have been proposed which capture some of these differences, and measures of polarization, as distinct from inequality, have been suggested. The theoretical distinctions proposed in this literature are indeed interesting. But the question remains what difference does it all make in actual application? Do the newly proposed measures of polarization give dramatically different results in comparing societies over time, or with each other? We address these questions for China, where dramatic increase in inequality and polarization have been much discussed in the literature. We find that, contrary to theoretical expectation, empirically the new measures of polarization do not give us very different results from the standard measures of inequality. The paper ends by considering a different way of thinking about polarization which might better conform to the empirical patterns observed, and policy concerns expressed