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On the decomposition of Gini coefficients by population class and income source: a spreadsheet approach and application

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  • Shujie Yao
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    Abstract

    There are in the literature many different formulae and methodologies for deriving and decomposing Gini coefficients. Needless to say, different methodologies have their own advantages and limitations. Some Gini formulae are unnecessarily complicated and impractical. Some are biased estimators and/or not decomposable. This paper presents a simple and exact formula and develops a systematic procedure for decomposition by population class and income source in a spreadsheet without using matrix algebra, integration, regression and covariances. The Gini formula and decomposition method can be used for individual data and for evenly or unevenly grouped data. Many complicated concepts regarding the Gini and its components are given an intuitive economic interpretation. A household survey data set for Sichuan, China, is used to demonstrate, step by step, how the methodology is applied in empirical analyses.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Economics.

    Volume (Year): 31 (1999)
    Issue (Month): 10 ()
    Pages: 1249-1264

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    Handle: RePEc:taf:applec:v:31:y:1999:i:10:p:1249-1264

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    Cited by:
    1. Babulo, Bedru & Muys, Bart & Nega, Fredu & Tollens, Eric & Nyssen, Jan & Deckers, Jozef & Mathijs, Erik, 2009. "The economic contribution of forest resource use to rural livelihoods in Tigray, Northern Ethiopia," Forest Policy and Economics, Elsevier, vol. 11(2), pages 123-131, March.
    2. Ross Guest & Robyn Swift, 2008. "Fertility, income inequality, and labour productivity," Oxford Economic Papers, Oxford University Press, vol. 60(4), pages 597-618, October.
    3. Ajit S. Bhalla & Shujie Yao & Zongyi Zhang, 2003. "Causes of inequalities in China, 1952 to 1999," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(8), pages 939-955.
    4. Wodon, Quentin & Yitzhaki, Shlomo, 2003. "The effect of using grouped data on the estimation of the Gini income elasticity," Economics Letters, Elsevier, vol. 78(2), pages 153-159, February.
    5. Zhang, Yingqiang & Eriksson, Tor, 2010. "Inequality of opportunity and income inequality in nine Chinese provinces, 1989-2006," China Economic Review, Elsevier, vol. 21(4), pages 607-616, December.
    6. JØrgen Lauridsen & Terkel Christiansen & Jens Gundgaard & Unto Häkkinen & Harri Sintonen, 2007. "Decomposition of health inequality by determinants and dimensions," Health Economics, John Wiley & Sons, Ltd., vol. 16(1), pages 97-102.
    7. Edward N. Wolff & Ajit Zacharias, 2007. "The Levy Institute Measure of Economic Well-Being United States, 1989-2001," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 443-470, Fall.
    8. Edward N. Wolff & Ajit Zacharias, 2007. "Class Structure and Economic Inequality," Economics Working Paper Archive wp_487, Levy Economics Institute.
    9. Yao, Shujie & Zhang, Zongyi & Hanmer, Lucia, 2004. "Growing inequality and poverty in China," China Economic Review, Elsevier, vol. 15(2), pages 145-163.
    10. Frank Bickenbach & Eckhardt Bode, 2006. "Disproportionality Measures of Concentration, Specialization, and Polarization," Kiel Working Papers 1276, Kiel Institute for the World Economy.

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