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) + 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 InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8071.
Date of creation: Oct 2010
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Other versions of this item:
- Alvaredo, Facundo, 2011. "A note on the relationship between top income shares and the Gini coefficient," Economics Letters, Elsevier, vol. 110(3), pages 274-277, March.
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
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- Andrew Leigh, 2007.
"How Closely Do Top Income Shares Track Other Measures of Inequality?,"
Royal Economic Society, vol. 117(524), pages F619-F633, November.
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