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A Rethink on Measuring Health Inequalities Using the Gini Coefficient

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Abstract

Objective- We show that a standardized Gini coefficient that takes into account the feasible range of health inequality for a given health attribute is a better instrument than the normal Gini coefficient for quantifying inter-individual health inequality. Methods- The standardized Gini coefficient is equal to the normal Gini coefficient divided by the maximal attainable Gini coefficient, which is computed based on the maximal level of a health attribute an individual could achieve. Both the old and new coefficients are used to estimate the lifespan inequality of 185 countries for year 1990, 2000 and 2006, respectively. The results are then compared both across countries and over time. Findings- Firstly, the standardized Gini coefficient can still be related to the Lorenz curve. Secondly, changes in standardized Gini coefficients can be decomposed into respectively the change in the distribution of health outcomes and the change in the average health outcomes. Thirdly, the standardized Gini coefficient provides richer information and often gives different conclusions regarding health inequality in individual countries as well as country ranking, as compared to the normal Gini coefficient. Conclusion- Accounting for the maximal level of health attribute an individual could achieve is important when measuring health inequality. The proposed standardized Gini coefficient can provide more accurate information regarding the actual level of health inequality in a society than the normal Gini coefficient

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Bibliographic Info

Paper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 381.

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Date of creation: 2008
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Handle: RePEc:qld:uq2004:381

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  1. Tang, Kam Ki & Chin, Jackie T.C. & Rao, D.S. Prasada, 2008. "Avoidable mortality risks and measurement of wellbeing and inequality," Journal of Health Economics, Elsevier, vol. 27(3), pages 624-641, May.
  2. Mackenbach, Johan P. & Kunst, Anton E., 1997. "Measuring the magnitude of socio-economic inequalities in health: An overview of available measures illustrated with two examples from Europe," Social Science & Medicine, Elsevier, vol. 44(6), pages 757-771, March.
  3. Dennis Petriea & Kam Ki Tang & D. S. Prasada Rao, 2009. "Measuring Avoidable Health Inequality with Realization of Conditional Potential Life Years (RCPLY)," Discussion Papers Series 395, School of Economics, University of Queensland, Australia.
  4. Kam Ki Tang & Dennis Petrie & D. S. Prasada Rao, 2009. "Measuring health inequality with realization of potential life years (RePLY)," Health Economics, John Wiley & Sons, Ltd., vol. 18(S1), pages S55-S75, April.
  5. Dejian Lai & Jin Huang & Jan Risser & Asha Kapadia, 2008. "Statistical Properties of Generalized Gini Coefficient with Application to Health Inequality Measurement," Social Indicators Research, Springer, vol. 87(2), pages 249-258, June.
  6. Wagstaff, Adam & Paci, Pierella & van Doorslaer, Eddy, 1991. "On the measurement of inequalities in health," Social Science & Medicine, Elsevier, vol. 33(5), pages 545-557, January.
  7. Adam Wagstaff, 2005. "The bounds of the concentration index when the variable of interest is binary, with an application to immunization inequality," Health Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 429-432.
  8. Kuan Xu, 2003. "How Has the Literature on Gini's Index Evolved in the Past 80 Years?," Department of Economics at Dalhousie University working papers archive howgini, Dalhousie, Department of Economics.
  9. Audrey Siew Kim LIM & Kam Ki TANG, 2008. "Human Capital Inequality And The Kuznets Curve," The Developing Economies, Institute of Developing Economies, vol. 46(1), pages 26-51.
  10. Manor, Orly & Matthews, Sharon & Power, Chris, 1997. "Comparing measures of health inequality," Social Science & Medicine, Elsevier, vol. 45(5), pages 761-771, September.
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Cited by:
  1. Becchetti, Leonardo & Massari, Riccardo & Naticchioni, Paolo, 2013. "The Drivers of Happiness Inequality: Suggestions for Promoting Social Cohesion," IZA Discussion Papers 7153, Institute for the Study of Labor (IZA).
  2. Dennis Petriea & Kam Ki Tang & D. S. Prasada Rao, 2009. "Measuring Avoidable Health Inequality with Realization of Conditional Potential Life Years (RCPLY)," Discussion Papers Series 395, School of Economics, University of Queensland, Australia.

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