This paper proposes a simple algorithm based on a matrix formulation to compute the Esteban and Ray (ER) polarization index. It then shows how the algorithm introduced leads to quite a simple decomposition of polarization by income sources. Such a breakdown was not available hitherto. The decomposition we propose will thus allow one to determine the sign, as well as the magnitude, of the impact of the various income sources on the ER polarization index. A simple empirical illustration based on EU data is provided.
Bibliographical noteFunding Information:
Acknowledgments: Elena Bárcena-Martín gratefully acknowledges the financial support provided by the University of Malaga.
© 2018 by the authors. Licensee MDPI, Basel, Switzerland.
- Esteban and ray polarization index
- Income sources