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E-Index for measuring concentration

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  • José Lorenzo

Abstract

The goal of measuring the existing concentration of an economic magnitude among the elements in which it is distributed has been over the past years one of the major worries in the economic statistics arena. Among all the concentration indexes, the Gini index has been applied to a greater extent. This study considers that the traditional Gini index definition, according to a wide array of introductory statistics textbooks, is only applicable in the case of unitary frequency distributions. When dealing with nonunitary frequency distributions, it is possible to convert them into unitary ones, allowing for the application of the Gini index. Nevertheless, it can be appreciated how laborious such a task will be in those cases where the number of elements of the distribution is of considerable magnitude. The aim of this paper is to avoid this handicap by presenting an alternative index, the E-index. Copyright International Atlantic Economic Society 2002

Suggested Citation

  • José Lorenzo, 2002. "E-Index for measuring concentration," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 8(4), pages 357-361, November.
    • Handle: RePEc:kap:iaecre:v:8:y:2002:i:4:p:357-361:10.1007/bf02295510
    DOI: 10.1007/BF02295510
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    1. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-255, June.
    2. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    3. Silber, Jacques, 1989. "Factor Components, Population Subgroups and the Computation of the Gini Index of Inequality," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 107-115, February.
    4. Lerman, Robert I. & Yitzhaki, Shlomo, 1984. "A note on the calculation and interpretation of the Gini index," Economics Letters, Elsevier, vol. 15(3-4), pages 363-368.
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