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Practical modified Gini index

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  • Miki Malul
  • Daniel Shapira
  • Amir Shoham

Abstract

The Gini index is the most common method for estimating the level of income inequality in countries. In this article, we suggest a simple modification that takes into account the moderating effect of in-kind government benefits. Unlike other studies that use micro-level data that are rarely available for many countries or over a period of time, the proposed Modified Gini (MGINI) index could be calculated using just the regularly available data for each country. Such data include the original Gini coefficient, government consumption expenditures, Gross Domestic Product (GDP) and total tax revenue as a percentage of GDP. This modified version of the Gini index allows us to calculate the level of inequality more precisely and make better comparisons between countries and over time.

Suggested Citation

  • Miki Malul & Daniel Shapira & Amir Shoham, 2013. "Practical modified Gini index," Applied Economics Letters, Taylor & Francis Journals, vol. 20(4), pages 324-327, March.
    • Handle: RePEc:taf:apeclt:v:20:y:2013:i:4:p:324-327
    DOI: 10.1080/13504851.2012.699182
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    References listed on IDEAS

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    1. Nolan, Brian & Russell, Helen, 2001. "Non-Cash Benefits and Poverty in Ireland," Research Series, Economic and Social Research Institute (ESRI), number PRS39.
    2. Tony Atkinson & Bea Cantillon & Eric Marlier & Brian Nolan, 2002. "Indicators for Social Inclusion," Politica economica, Società editrice il Mulino, issue 1, pages 7-28.
    3. Tom Sefton, 2002. "Recent Changes in the Distribution of the Social Wage," CASE Papers case62, Centre for Analysis of Social Exclusion, LSE.
    4. Atkinson, Tony & Cantillon, Bea & Marlier, Eric & Nolan, Brian, 2002. "Social Indicators: The EU and Social Inclusion," OUP Catalogue, Oxford University Press, number 9780199253494.
    5. Tom Sefton, 2002. "Recent Changes in the Distribution of the Social Wage," CASE Papers 062, Centre for Analysis of Social Exclusion, LSE.
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    Cited by:

    1. Thomas Ziesemer, 2022. "Global Dynamics of Gini Coefficients of Education for 146 Countries: Update to 1950-2015 and a Compact Guide to the Literature," Bulletin of Applied Economics, Risk Market Journals, vol. 9(1), pages 85-95.

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