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A Note on the Interpretation and Application of the Gini Coefficient

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  • Kwang Soo Cheong

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    (Department of Economics, University of Hawaii at Manoa)

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    Abstract

    We show that the Gini coefficient is a simple linear transformation of the center of gravity of income distribution. The new derivation and inequality decomposition methods are applied to income data for Korea in order to analyze the distributional impact of the recent economic crisis. We also discuss the potential benefits of using additional higher moments of the relative income rankings.

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    File URL: http://www.economics.hawaii.edu/research/workingpapers/991.pdf
    File Function: First version, 1999
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    Bibliographic Info

    Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 199901.

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    Length: 18 pages
    Date of creation: 1999
    Date of revision:
    Handle: RePEc:hai:wpaper:199901

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    Related research

    Keywords: Income Inequality; the Gini coeffcient; and the Lorenz curve;

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    References

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    1. Branko Milanovic, 1994. "The Gini-Type Functions: An Alternative Derivation," Bulletin of Economic Research, Wiley Blackwell, vol. 46(1), pages 81-90, 01.
    2. Sastry, D V S & Kelkar, Ujwala R, 1994. "Note on the Decomposition of Gini Inequality," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 584-86, August.
    3. 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.
    4. Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-27, September.
    5. Sheshinski, Eytan, 1972. "Relation between a social welfare function and the gini index of income inequality," Journal of Economic Theory, Elsevier, vol. 4(1), pages 98-100, February.
    6. Shorrocks, Anthony F & Foster, James E, 1987. "Transfer Sensitive Inequality Measures," Review of Economic Studies, Wiley Blackwell, vol. 54(3), pages 485-97, July.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Wealth inequality: measurement, resilience, and an anti-Rentoul hypothesis
      by paulinlancs in Though Cowards Flinch on 2012-12-28 19:20:05

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