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Inequality as experienced difference: A reformulation of the Gini coefficient

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  • Carlin, Wendy
  • Bowles, Samuel

Abstract

We represent a population as a complete undirected network, the edges of which are the fundamental data on experienced disparities. This yields a Gini coefficient (for wealth, say) for finite populations that is based on the mean wealth difference between all pairs of individuals relative to the mean wealth, which we demonstrate is not the case for the conventional Lorenz curve representation and the algorithm widely-used to calculate it. Our method also provides simple and intuitive explanations of the effects on the Gini coefficient of changes in the wage share, the employment rate, and other macroeconomic and demographic variables.

Suggested Citation

  • Carlin, Wendy & Bowles, Samuel, 2018. "Inequality as experienced difference: A reformulation of the Gini coefficient," CEPR Discussion Papers 13211, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13211
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    2. Godoy, Ricardo & Bauchet, Jonathan & Behrman, Jere R. & Huanca, Tomás & Leonard, William R. & Reyes-García, Victoria & Rosinger, Asher & Tanner, Susan & Undurraga, Eduardo A. & Zycherman, Ariela, 2024. "Changes in adult well-being and economic inequalities: An exploratory observational longitudinal study (2002–2010) of micro-level trends among Tsimane’, a small-scale rural society of Indigenous Peopl," World Development, Elsevier, vol. 176(C).
    3. Yiguo Shen & Xiaojie Chen & Qingxin Yao & Jiahui Ding & Yuhan Lai & Yongheng Rao, 2023. "Examining the Impact of China’s Poverty Alleviation on Nighttime Lighting in 831 State-Level Impoverished Counties," Land, MDPI, vol. 12(6), pages 1-17, May.
    4. Sarkar, Sandip, 2023. "Gini decomposition: An inequality of opportunity perspective," Economics Letters, Elsevier, vol. 223(C).
    5. Yu, Shanchuan & Gao, Kun & Song, Lang & Du, Yuchuan, 2025. "Equitable tradable parking permit scheme for shared nonpublic parking management," Transportation Research Part A: Policy and Practice, Elsevier, vol. 195(C).
    6. Amy E Thompson & Gary M Feinman & Keith M Prufer, 2021. "Assessing Classic Maya multi-scalar household inequality in southern Belize," PLOS ONE, Public Library of Science, vol. 16(3), pages 1-30, March.
    7. Meng Tian & Lei Yuan & Renzhong Guo & Yongsheng Wu & Xiaojian Liu, 2022. "Evaluations of Spatial Accessibility and Equity of Multi-Tiered Medical System: A Case Study of Shenzhen, China," IJERPH, MDPI, vol. 19(5), pages 1-18, March.
    8. Xiaogeng Xu & Satu Metsälampi & Michael Kirchler & Kaisa Kotakorpi & Peter Hans Matthews & Topi Miettinen, 2023. "Which income comparisons matter to people, and how? Evidence from a large field experiment," Working Papers 2023-05, Faculty of Economics and Statistics, Universität Innsbruck.
    9. Tsvetkova, Milena & Olsson, Henrik & Galesic, Mirta, 2024. "Social networks affect redistribution decisions and polarization," OSF Preprints bw7ux_v1, Center for Open Science.
    10. Mamunuru, Sai Madhurika & Shrivastava, Anand & Jayadev, Arjun, 2025. "Social networks and experienced inequality," Journal of Economic Behavior & Organization, Elsevier, vol. 229(C).

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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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