Statistical inference on changes in income polarization in Poland
Statistical inference on changes in income polarization in Poland

Summary/Abstract: This paper estimates a popular measure of economic polarization (DER index) using Polish income micro-data from the Household Budget Survey (HBS) study for the period from 1998 to 2007. Using asymptotically distribution-free statistical inference we test whether the changes in the values of the estimated indices are statistically significant. Results show that during the period under study DER index has increased in the range from 4.9 to 6.5%, depending on the polarization-sensitivity parameter α. For the period 1998-2007, the changes in the DER index with α = 1, for which polarization is empirically distinguishable from inequality, are statistically significant at conventional levels. It is found, however, that for some sub-periods changes in the DER index are not statistically significant.

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