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Measuring and explaining economic inequality: An extension of the Gini coefficient

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  • Chameni Nembua, Célestin

Abstract

This paper proposes a new class of inequality indices based on the Gini’s coefficient. The properties of the indices are studied and in particular they are found to be regular, relative and satisfy the Pigou-Dalton transfer principle. A subgroup decomposition is performed and the method is found to be similar to the one used by Dagum when decomposing the Gini index. The theoretical results are illustrated by case studies, using Cameroonian data.

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File URL: http://mpra.ub.uni-muenchen.de/31242/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31242.

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Date of creation: 2008
Date of revision: 2010
Handle: RePEc:pra:mprapa:31242

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Keywords: Measuring inequality; Generalisation of the Gini index; Pigou-Dalton’s transfer; Subgroup decomposition.;

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  1. Chotikapanich, D. & Griffiths, W., 2001. "On Calculation of the Extended Gini Coefficient," Department of Economics - Working Papers Series, The University of Melbourne 801, The University of Melbourne.
  2. Yitzhaki, Shlomo, 1983. "On an Extension of the Gini Inequality Index," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(3), pages 617-28, October.
  3. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, Econometric Society, vol. 48(3), pages 613-25, April.
  4. Stephane Mussard, 2004. "The bidimensional decomposition of the Gini ratio. A case study: Italy," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 11(8), pages 503-505.
  5. repec:ebl:ecbull:v:4:y:2003:i:7:p:1-6 is not listed on IDEAS
  6. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, Econometric Society, vol. 47(4), pages 901-20, July.
  7. Dagum, Camilo, 1997. "A New Approach to the Decomposition of the Gini Income Inequality Ratio," Empirical Economics, Springer, Springer, vol. 22(4), pages 515-31.
  8. Stéphane Mussard & Michel Terraza & Françoise Seyte, 2003. "Decomposition of Gini and the generalized entropy inequality measures," Economics Bulletin, AccessEcon, vol. 4(7), pages 1-6.
  9. Cowell, Frank A, 1980. "On the Structure of Additive Inequality Measures," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 47(3), pages 521-31, April.
  10. Shorrocks, Anthony F, 1984. "Inequality Decomposition by Population Subgroups," Econometrica, Econometric Society, Econometric Society, vol. 52(6), pages 1369-85, November.
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