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International Economic Review
Article . 1987 . Peer-reviewed
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Dispersion, Asymmetry and the Gini Index of Inequality

Dispersion, asymmetry and the Gini index of inequality
Authors: Berrebi, Z M; Silber, Jacques G;

Dispersion, Asymmetry and the Gini Index of Inequality

Abstract

This paper focuses on the Gini index and presents two additional features which may be characterized as new indices of location and skewness. In section 2, a fast computation algorithm of the Gini index is shown. This algorithm demonstrates that Gini's index belongs to the class of relative mean deviations. In section 3 a ``G-Mean'' is defined as \(y_ G=(y_{GR}+y_{GL})\), where \(y_{GR}\) and \(y_{GL}\) are two income levels which may be computed as partial sums of \(\sum_{i}k_ iy_ i\) for \(i\leq (n/2)\) and \(i>(n/2)\), respectively, and \[ k_ i=| (m- 2i+1)\sum^{n/2}_{i=1}(n-2i+1)|. \] The G-Mean is the income a in the following expression which minimizes \(\sum^{n}_{i=1}c_ i(y_ i-a)^ 2\), with \(c_ i\) specified in Proposition 2. Besides the mean value property, \(y_ G\) takes into account the ranking of the incomes. Thus, the G-Mean is a combination of median and arithmetic mean. In section 4, with \(y_ G\) and Gini's mean difference a relative asymmetry index \(A^ R=2(y_ G-y)/\Delta\) is defined which is translation invariant and homogeneous of degree zero. This index is compared with Pearson's asymmetry index \(A_ p\). \(A^ R\) is included in [-1,1], equals zero when the income distribution is symmetric with respect to the mean income, tends towards \(+1\) when all individuals but one have zero income (Proposition 3). In section 5, the relationship between Gini's inequality index \(I^ R_ G\) and \(A^ R\) is characterized. With symmetric income distributions we have \(I^ R_ G\leq\) (Proposition 4), and \(I^ R_ G>\) \(\Rightarrow\) \(A^ R>0\) (Proposition 5). This implies a necessary condition for the elasticity of social welfare.

Keywords

indices of location and skewness, inequality index, Gini index, G-Mean, arithmetic mean, Pearson's asymmetry index, elasticity of social welfare, Statistical methods; economic indices and measures, Applications of statistics to economics, relative mean deviations

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
14
Average
Top 10%
Average
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