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Computing the Gini index: A note

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  • Furman, Edward
  • Kye, Yisub
  • Su, Jianxi

Abstract

The Gini index of inequality has been extensively studied by economists in a variety of contexts with the notions of wealth and income distribution serving as two primary examples. Nevertheless, the Gini index is by far less popular outside of the economics literature, and even in economics it is not uncommon to replace Gini with other measures of inequality. A reason for this lies in the critics associated with the computability of the Gini index. In this note, we reveal convenient ways to compute the Gini index explicitly and in some cases effortlessly. The thrust of our approach is the herein discovered link between the Gini index and the notion of statistical sample size-bias. Not only the just-mentioned link opens up advantageous computational routes for the Gini index, but also yields an alternative interpretation for it.

Suggested Citation

  • Furman, Edward & Kye, Yisub & Su, Jianxi, 2019. "Computing the Gini index: A note," Economics Letters, Elsevier, vol. 185(C).
    • Handle: RePEc:eee:ecolet:v:185:y:2019:i:c:s0165176519303787
    DOI: 10.1016/j.econlet.2019.108753
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    References listed on IDEAS

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    1. James B. McDonald, 2008. "Some Generalized Functions for the Size Distribution of Income," Economic Studies in Inequality, Social Exclusion, and Well-Being, in: Duangkamon Chotikapanich (ed.), Modeling Income Distributions and Lorenz Curves, chapter 3, pages 37-55, Springer.
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    4. 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.
    5. Edward Furman & Ričardas Zitikis, 2009. "Weighted Pricing Functionals With Applications to Insurance," North American Actuarial Journal, Taylor & Francis Journals, vol. 13(4), pages 483-496.
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    Cited by:

    1. Zhang, Xiaoyu & Xu, Maochao & Su, Jianxi & Zhao, Peng, 2023. "Structural models for fog computing based internet of things architectures with insurance and risk management applications," European Journal of Operational Research, Elsevier, vol. 305(3), pages 1273-1291.
    2. Battaïa, Olga & Guillaume, Romain & Krug, Zoé & Oloruntoba, Richard, 2023. "Environmental and social equity in network design of sustainable closed-loop supply chains," International Journal of Production Economics, Elsevier, vol. 264(C).
    3. Ruijia Wu & Rafael Alvarado & Priscila Méndez & Brayan Tillaguango, 2024. "Impact of Informational and Cultural Globalization, R&D, and Urbanization on Inequality," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 1666-1702, March.
    4. Songpu Shang & Songhao Shang, 2021. "Estimating Gini Coefficient from Grouped Data Based on Shape-Preserving Cubic Hermite Interpolation of Lorenz Curve," Mathematics, MDPI, vol. 9(20), pages 1-11, October.

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    More about this item

    Keywords

    Gini index; Size-bias; Fox-H distribution;
    All these keywords.

    JEL classification:

    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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