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Numerical method to calculate Gini coefficient from limited data of subgroups

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  • Weidong Huang

Abstract

A numerical method is proposed to calculate the income distribution and Gini coefficient of the total population from the limited data of subgroups. The method is optimized to simulate the Lorenz curve of each subgroup with the third spline interpolation, and the cumulative income distribution curve of each subgroup and the total population is calculated. Thus the Lorenz curve of the total population can be predicted to obtain the Gini coefficient. The method can simulate the complex income distribution with a relative error of less than 4%. It overcomes the defect of the present method with a function to simulate the complex income distribution of subgroup such as the multiple peaks which will introduce much more error.

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  • Weidong Huang, 2013. "Numerical method to calculate Gini coefficient from limited data of subgroups," Applied Economics Letters, Taylor & Francis Journals, vol. 20(13), pages 1249-1253, September.
    • Handle: RePEc:taf:apeclt:v:20:y:2013:i:13:p:1249-1253
    DOI: 10.1080/13504851.2013.802083
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    1. Branko Milanovic, 2002. "True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone," Economic Journal, Royal Economic Society, vol. 112(476), pages 51-92, January.
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    3. Chotikapanich, Duangkamon & Griffiths, William E. & Rao, D. S. Prasada, 2007. "Estimating and Combining National Income Distributions Using Limited Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 97-109, January.
    4. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
    5. A.B. Atkinson & F. Bourguignon (ed.), 2000. "Handbook of Income Distribution," Handbook of Income Distribution, Elsevier, edition 1, volume 1, number 1.
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    1. N. Nakhaei Rad & G.R. Mohtashami Borzadaran & G.H. Yari, 2016. "Maximum entropy estimation of income share function from generalized Gini index," Journal of Applied Statistics, Taylor & Francis Journals, vol. 43(16), pages 2910-2921, December.

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