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Individual Diversity and the Gini Decomposition

Author

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  • Lidia Ceriani

    (EconPubblica, Bocconi University, Milano)

  • Paolo Verme

    (The World Bank)

Abstract

The paper defines the Gini index as the sum of individual contributions where individual contributions are interpreted as the degree of diversity of each individual from all other members of society. Among various possible forms of individual contributions to the Gini found in the literature, we show that only one form satisfies a set of desirable properties. This form can be used for decomposing the Gini into population subgroups. An illustration with UK data shows the use of this approach.

Suggested Citation

  • Lidia Ceriani & Paolo Verme, 2014. "Individual Diversity and the Gini Decomposition," Working Papers 321, ECINEQ, Society for the Study of Economic Inequality.
  • Handle: RePEc:inq:inqwps:ecineq2014-321
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    File URL: http://www.ecineq.org/milano/WP/ECINEQ2014-321.pdf
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    References listed on IDEAS

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    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
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    3. Lidia Ceriani & Paolo Verme, 2012. "The origins of the Gini index: extracts from Variabilità e Mutabilità (1912) by Corrado Gini," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(3), pages 421-443, September.
    4. Anthony Shorrocks, 2013. "Decomposition procedures for distributional analysis: a unified framework based on the Shapley value," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 11(1), pages 99-126, March.
    5. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-255, June.
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    7. Bourguignon, Francois, 1979. "Decomposable Income Inequality Measures," Econometrica, Econometric Society, vol. 47(4), pages 901-920, July.
    8. Charles Blackorby & David Donaldson & Maria Auersperg, 1981. "A New Procedure for the Measurement of Inequality within and among Population Subgroups," Canadian Journal of Economics, Canadian Economics Association, vol. 14(4), pages 665-685, November.
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    Cited by:

    1. Piotr Dniestrzański & Janusz Łyko, 2015. "The Disproportion Of Allocation Under The Given Boundary Conditions," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 9(1), pages 118-126.
    2. Neves Costa, Rita & Pérez-Duarte, Sébastien, 2019. "Not all inequality measures were created equal - The measurement of wealth inequality, its decompositions, and an application to European household wealth," Statistics Paper Series 31, European Central Bank.
    3. Iñaki Permanyer & Nicolai Suppa, 2021. "Racing ahead or lagging behind? Territorial cohesion in human development around the globe," Working Papers 569, ECINEQ, Society for the Study of Economic Inequality.

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    More about this item

    Keywords

    Gini; Inequality; Decomposition;
    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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