Dundee Discussion Papers in Economics 281: Income stratification and the measurement of interdistributional inequality between multiple groups

This paper proposes a new class of stratification indices that measure interdistributional inequality between multiple groups. The class is based on a conceptualisation of stratification as a process that results in a hierarchical ordering of groups and therefore seeks to capture not only the extent to which groups form well-defined strata in the income distribution but also the scale of the resultant differences in income standards between them, where these two factors play the same role as identification and alienation respectively in the measurement of polarisation. The properties of the class as a whole are investigated as well as those of selected members of it: the first two integer members may be interpreted as measuring the overall incidence and depth of stratification, while higher-order members are directly sensitive to the severity of stratification between groups. An illustrative application provides an empirical analysis of global income stratification by regions in 1993.