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Individual Diversity and the Gini Decomposition

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  • Lidia Ceriani
  • Paolo Verme

Abstract

The paper defines the Gini index as the sum of individual contributions where individual contributions are interpreted as the degree of diversity of each individual from all other members of society. Among various possible forms of individual contributions to the Gini found in the literature, we show that only one form satisfies a set of desirable properties. This form can be used for decomposing the Gini into population subgroups. An empirical illustration shows the use of this approach. Copyright Springer Science+Business Media Dordrecht 2015

Suggested Citation

  • Lidia Ceriani & Paolo Verme, 2015. "Individual Diversity and the Gini Decomposition," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 121(3), pages 637-646, April.
    • Handle: RePEc:spr:soinre:v:121:y:2015:i:3:p:637-646
    DOI: 10.1007/s11205-014-0656-0
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    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
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    3. Lidia Ceriani & Paolo Verme, 2012. "The origins of the Gini index: extracts from Variabilità e Mutabilità (1912) by Corrado Gini," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(3), pages 421-443, September.
    4. Anthony Shorrocks, 2013. "Decomposition procedures for distributional analysis: a unified framework based on the Shapley value," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 99-126, March.
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    9. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
    10. 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.
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    3. Silvia De Nicol`o & Maria Rosaria Ferrante & Silvia Pacei, 2021. "Mind the Income Gap: Bias Correction of Inequality Estimators in Small-Sized Samples," Papers 2107.08950, arXiv.org, revised May 2023.
    4. Neves Costa, Rita & Pérez-Duarte, Sébastien, 2019. "Not all inequality measures were created equal - The measurement of wealth inequality, its decompositions, and an application to European household wealth," Statistics Paper Series 31, European Central Bank.
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    6. Anson Au, 2023. "Reassessing the econometric measurement of inequality and poverty: toward a cost-of-living approach," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.

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    More about this item

    Keywords

    Gini; Inequality; Decomposition; Income distribution; Welfare measurement;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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