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On the decomposition of Gini coefficients by population class and income source: a spreadsheet approach and application


  • Shujie Yao


There are in the literature many different formulae and methodologies for deriving and decomposing Gini coefficients. Needless to say, different methodologies have their own advantages and limitations. Some Gini formulae are unnecessarily complicated and impractical. Some are biased estimators and/or not decomposable. This paper presents a simple and exact formula and develops a systematic procedure for decomposition by population class and income source in a spreadsheet without using matrix algebra, integration, regression and covariances. The Gini formula and decomposition method can be used for individual data and for evenly or unevenly grouped data. Many complicated concepts regarding the Gini and its components are given an intuitive economic interpretation. A household survey data set for Sichuan, China, is used to demonstrate, step by step, how the methodology is applied in empirical analyses.

Suggested Citation

  • Shujie Yao, 1999. "On the decomposition of Gini coefficients by population class and income source: a spreadsheet approach and application," Applied Economics, Taylor & Francis Journals, vol. 31(10), pages 1249-1264.
  • Handle: RePEc:taf:applec:v:31:y:1999:i:10:p:1249-1264
    DOI: 10.1080/000368499323463

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    References listed on IDEAS

    1. Per Andersen & Niels Christian Petersen, 1993. "A Procedure for Ranking Efficient Units in Data Envelopment Analysis," Management Science, INFORMS, vol. 39(10), pages 1261-1264, October.
    2. Borden, James P., 1988. "An assessment of the impact of diagnosis-related group (DRG)-based reimbursement on the technical efficiency of New Jersey hospitals using data envelopment analysis," Journal of Accounting and Public Policy, Elsevier, vol. 7(2), pages 77-96.
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    1. Francesca Gastaldi & Paolo Liberati & Elena Pisano & Simone Tedeschi, 2014. "Progressivity-Improving VAT Reforms in Italy," Working papers 6, Società Italiana di Economia Pubblica.
    2. Edward N. Wolff & Ajit Zacharias, 2013. "Class structure and economic inequality," Cambridge Journal of Economics, Oxford University Press, vol. 37(6), pages 1381-1406.
    3. Zhang, Yingqiang & Eriksson, Tor, 2010. "Inequality of opportunity and income inequality in nine Chinese provinces, 1989-2006," China Economic Review, Elsevier, vol. 21(4), pages 607-616, December.
    4. Ross Guest & Robyn Swift, 2008. "Fertility, income inequality, and labour productivity," Oxford Economic Papers, Oxford University Press, vol. 60(4), pages 597-618, October.
    5. Yao, Shujie & Zhang, Zongyi & Hanmer, Lucia, 2004. "Growing inequality and poverty in China," China Economic Review, Elsevier, vol. 15(2), pages 145-163.
    6. Edward N. Wolff & Ajit Zacharias, 2007. "The Levy Institute Measure of Economic Well-Being United States, 1989-2001," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 443-470, Fall.
    7. Babulo, Bedru & Muys, Bart & Nega, Fredu & Tollens, Eric & Nyssen, Jan & Deckers, Jozef & Mathijs, Erik, 2009. "The economic contribution of forest resource use to rural livelihoods in Tigray, Northern Ethiopia," Forest Policy and Economics, Elsevier, vol. 11(2), pages 123-131, March.
    8. Ogwang Tomson, 2014. "A Convenient Method of Decomposing the Gini Index by Population Subgroups," Journal of Official Statistics, De Gruyter Open, vol. 30(1), pages 91-105, March.
    9. Wodon, Quentin & Yitzhaki, Shlomo, 2003. "The effect of using grouped data on the estimation of the Gini income elasticity," Economics Letters, Elsevier, vol. 78(2), pages 153-159, February.
    10. Cheong, Tsun Se & Wu, Yanrui, 2014. "The impacts of structural transformation and industrial upgrading on regional inequality in China," China Economic Review, Elsevier, vol. 31(C), pages 339-350.
    11. repec:ijm:journl:v10:y:2017:i:1:p:39-72 is not listed on IDEAS
    12. Feng, Kuishuang & Hubacek, Klaus & Guan, Dabo, 2009. "Lifestyles, technology and CO2 emissions in China: A regional comparative analysis," Ecological Economics, Elsevier, vol. 69(1), pages 145-154, November.
    13. JØrgen Lauridsen & Terkel Christiansen & Jens Gundgaard & Unto Häkkinen & Harri Sintonen, 2007. "Decomposition of health inequality by determinants and dimensions," Health Economics, John Wiley & Sons, Ltd., vol. 16(1), pages 97-102.
    14. Achille VERNIZZI & Maria Giovanna MONTI & Mauro MUSSINI, 2010. "A Gini and concentration index decomposition with an application to the APK reranking measure," Departmental Working Papers 2010-10, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano, revised 13 Dec 2010.
    15. Ajit S. Bhalla & Shujie Yao & Zongyi Zhang, 2003. "Causes of inequalities in China, 1952 to 1999," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(8), pages 939-955.
    16. Gerardo Angeles-Castro, 2007. "Factors Driving Changes in Income Distribution in Post-Reform Mexico," Studies in Economics 0706, School of Economics, University of Kent.
    17. Bickenbach, Frank & Bode, Eckhardt, 2006. "Disproportionality measures of concentration, specialization, and polarization," Kiel Working Papers 1276, Kiel Institute for the World Economy (IfW).

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