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About the Accuracy of Gini Index for Measuring the Poverty

Author

Listed:
  • Stefanescu, Stefan V.

    (The Research Institute for Quality of Life, Romanian Academy)

Abstract

The Gini index is often used to measure the income inequality presented inside a specified group of individuals and sometimes also for evaluating the “poverty” degree of this population. In this article we show that Gini’s index is not always so adequate to measure the poverty level of an analyzed population. More precisely, we’ll get two very different income distributions which finally give the same value for Gini’s index. Having in mind this aspect, we recommend with priority to use the Gini index only together with other similar or complementary poverty indicators to evaluate the poverty level of a given population.

Suggested Citation

  • Stefanescu, Stefan V., 2011. "About the Accuracy of Gini Index for Measuring the Poverty," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 255-266, September.
    • Handle: RePEc:rjr:romjef:v::y:2011:i:3:p:255-266
    as

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    References listed on IDEAS

    as
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      by Mike Isaacson in Vulgar Economics on 2015-06-14 20:00:00

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    More about this item

    Keywords

    measurement and analysis of poverty; Gini index; Lorenz curve; income distribution; inequality index;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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