ABSTRACT
The late Professor Berrebi dedicated an important part of his academic career to the study of income inequality. Although the concept of polarization started to appear in the economic literature in the 1990s, pioneering works by Berrebi and Silber (1988) related to distances between income distributions and mainly Berrebi and Silber (1989) on the flatness of income distributions have been shown to be related to measures of bi-polarization, bi-polarization being an index of dispersion between a variable (say income) and a central tendency such as the median (see e.g. Silber, Deutsch and Hanoka, 2007). Since then, the literature has provided many analyses of income polarization (see Esteban and Ray, 1994, Wolfson, 1994 and 1997, Wang and Tsui, 2000 and Duclos, Esteban and Ray, 2004 among others). Referring to Chakravarty et al. (2007), who proposed absolute measures of bi-polarization, we introduce a general class of rank-dependent absolute bi-polarization indices. One interesting aspect pointed out in this chapter is the analysis of the impact of public policies on bi-polarization. Precisely, we propose a method to identify bi-polarization-reducing tax reforms.
