A note on the relationship between top income shares and the Gini coefficient
AbstractWhen a very top group of the income distribution, infinitesimal in numbers, owns a finite share S of total income, the Gini coefficient G can be approximated by G*(1 - S)Â +Â S, where G* is the Gini coefficient for the rest of the population. We provide a simple formal proof for this expression, give a general formula of the relationship when the top group is not infinitesimal, and offer two applications as illustrations.
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 110 (2011)
Issue (Month): 3 (March)
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Web page: http://www.elsevier.com/locate/ecolet
Gini coefficient Top income shares Pareto distribution;
Other versions of this item:
- Alvaredo, Facundo, 2010. "A Note on the Relationship between Top Income Shares and the Gini Coefficient," CEPR Discussion Papers 8071, C.E.P.R. Discussion Papers.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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