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A bottom poor sensitive Gini coefficient and maximum entropy estimation of income distributions

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  • Ryu, Hang Keun

Abstract

A bottom poor sensitive Gini coefficient (pgini) is defined by replacing income observations with their reciprocal values in the Gini coefficient. The underlying true income share function can be derived approximately using the maximum entropy method given the pgini coefficient.

Suggested Citation

  • Ryu, Hang Keun, 2013. "A bottom poor sensitive Gini coefficient and maximum entropy estimation of income distributions," Economics Letters, Elsevier, vol. 118(2), pages 370-374.
    • Handle: RePEc:eee:ecolet:v:118:y:2013:i:2:p:370-374
    DOI: 10.1016/j.econlet.2012.11.018
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    References listed on IDEAS

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    1. Fields, Gary S & Fei, John C H, 1978. "On Inequality Comparisons," Econometrica, Econometric Society, vol. 46(2), pages 303-316, March.
    2. Donaldson, David & Weymark, John A., 1983. "Ethically flexible gini indices for income distributions in the continuum," Journal of Economic Theory, Elsevier, vol. 29(2), pages 353-358, April.
    3. Wolfson, Michael C, 1994. "When Inequalities Diverge," American Economic Review, American Economic Association, vol. 84(2), pages 353-358, May.
    4. Ryu, Hang K., 1993. "Maximum entropy estimation of density and regression functions," Journal of Econometrics, Elsevier, vol. 56(3), pages 397-440, April.
    5. Kakwani, Nanak, 1980. "On a Class of Poverty Measures," Econometrica, Econometric Society, vol. 48(2), pages 437-446, March.
    6. Dagum, Camilo, 1997. "A New Approach to the Decomposition of the Gini Income Inequality Ratio," Empirical Economics, Springer, vol. 22(4), pages 515-531.
    7. 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, vol. 24(3), pages 617-628, October.
    8. Hang Keun Ryu, 2008. "Maximum Entropy Estimation of Income Distributions from Bonferroni Indices," Economic Studies in Inequality, Social Exclusion, and Well-Being, in: Duangkamon Chotikapanich (ed.), Modeling Income Distributions and Lorenz Curves, chapter 10, pages 193-210, Springer.
    9. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    10. 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.
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    Cited by:

    1. Russell Davidson, 2018. "Statistical Inference on the Canadian Middle Class," Econometrics, MDPI, vol. 6(1), pages 1-18, March.
    2. Michael McAleer & Hang K. Ryu & Daniel J. Slottje, 2019. "A New Inequality Measure that is Sensitive to Extreme Values and Asymmetries," Advances in Decision Sciences, Asia University, Taiwan, vol. 23(1), pages 31-61, March.
    3. G.-Fivos Sargentis & Theano Iliopoulou & Panayiotis Dimitriadis & Nikolaos Mamassis & Demetris Koutsoyiannis, 2021. "Stratification: An Entropic View of Society’s Structure," World, MDPI, vol. 2(2), pages 1-22, March.
    4. IVASKAITE-TAMOSIUNE Viginta & THIEMANN Andreas, 2021. "The budgetary and redistributive impact of pension taxation in the EU: A microsimulation analysis," JRC Working Papers on Taxation & Structural Reforms 2021-08, Joint Research Centre.
    5. N. Nakhaei Rad & G.R. Mohtashami Borzadaran & G.H. Yari, 2016. "Maximum entropy estimation of income share function from generalized Gini index," Journal of Applied Statistics, Taylor & Francis Journals, vol. 43(16), pages 2910-2921, December.
    6. Preda, Vasile & Dedu, Silvia & Gheorghe, Carmen, 2015. "New classes of Lorenz curves by maximizing Tsallis entropy under mean and Gini equality and inequality constraints," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 436(C), pages 925-932.
    7. Ryu, Hang K. & Slottje, Daniel J., 2017. "Maximum entropy estimation of income distributions from Basmann’s weighted geometric mean measure," Journal of Econometrics, Elsevier, vol. 199(2), pages 221-231.
    8. Christiana Manu, 2021. "Effect of Globalization on Income Inequality in Ghana," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 13(2), pages 1-15, February.

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    More about this item

    Keywords

    Gini coefficient; Bonferroni index; Wolfson polarization index; Maximum entropy method;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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