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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- Lopez, Ramon E., 2011. "Fiscal Policy in Chile: Promoting Faustian Growth?," Working Papers 143326, University of Maryland, Department of Agricultural and Resource Economics.
- Foellmi, Reto & Martinez, Isabel, 2012. "Volatile Top Income Shares in Switzerland? Reassessing the Evolution Between 1981 and 2008," Economics Working Paper Series 1227, University of St. Gallen, School of Economics and Political Science, revised Jun 2013.
- Ramón E. López & Eugenio Figueroa, 2011. "Fiscal policy in Chile: Hindering sustainable development by favoring myopic growth," Working Papers wp346, University of Chile, Department of Economics.
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