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A Note on the Interpretation and Application of the Gini Coefficient

Author

Listed:
  • Kwang Soo Cheong

    () (Department of Economics, University of Hawaii at Manoa)

Abstract

We show that the Gini coefficient is a simple linear transformation of the center of gravity of income distribution. The new derivation and inequality decomposition methods are applied to income data for Korea in order to analyze the distributional impact of the recent economic crisis. We also discuss the potential benefits of using additional higher moments of the relative income rankings.

Suggested Citation

  • Kwang Soo Cheong, 1999. "A Note on the Interpretation and Application of the Gini Coefficient," Working Papers 199901, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:199901
    as

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    File URL: http://www.economics.hawaii.edu/research/workingpapers/991.pdf
    File Function: First version, 1999
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    References listed on IDEAS

    as
    1. 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.
    2. Anthony F. Shorrocks & James E. Foster, 1987. "Transfer Sensitive Inequality Measures," Review of Economic Studies, Oxford University Press, vol. 54(3), pages 485-497.
    3. Sastry, D V S & Kelkar, Ujwala R, 1994. "Note on the Decomposition of Gini Inequality," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 584-586, August.
    4. Sheshinski, Eytan, 1972. "Relation between a social welfare function and the gini index of income inequality," Journal of Economic Theory, Elsevier, vol. 4(1), pages 98-100, February.
    5. Branko Milanovic, 1994. "The Gini-Type Functions: An Alternative Derivation," Bulletin of Economic Research, Wiley Blackwell, vol. 46(1), pages 81-90, January.
    6. 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.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Wealth inequality: measurement, resilience, and an anti-Rentoul hypothesis
      by paulinlancs in Though Cowards Flinch on 2012-12-29 01:20:05

    More about this item

    Keywords

    Income Inequality; the Gini coeffcient; and the Lorenz curve;

    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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