On Bi-Polarization and the Middle Class in Latin America: A Look at the First Decade of the Twenty First Century

Abstract

This paper proposes a new index and graphical representation of the change in bi-polarization and in the relative importance of the middle class that took place in a given country during a given period. These tools extend in fact the concepts of inter-distribution income inequality and Lorenz curves by making a distinction between overall, “pure growth based” and “shape related” distributional changes. The empirical illustration is based on data covering 17 Latin American countries in 2000 and 2009, obtained from the Latinobarómetro surveys for these years. The standard of living of individuals was derived on the basis of correspondence analysis. It appears that these new tools help understanding the changes that took place in the distribution of standards of living during the period analysed.