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Inequality Decomposition Analysis and the Gini Coefficient Revisited

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  • Lambert, Peter J
  • Aronson, J Richard

Abstract

The Gini coefficient has long been thought unsuitable for inequality decomposition analysis because of a troublesome and little-understood residual term that occurs when subgroup income ranges overlap after the between-groups and within-groups contributions to inequality have been separated out. In this paper, graphical analysis is used to provide a solid understanding of the residual term as a subarea of the Lorenz diagram. Implications for inequality decomposition analysis are considered. Copyright 1993 by Royal Economic Society.

Suggested Citation

  • Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-1227, September.
  • Handle: RePEc:ecj:econjl:v:103:y:1993:i:420:p:1221-27
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