Subgroup Decomposition of the Gini Coefficient: A New Solution to an Old Problem

Vesa-Matti Heikkuri () and Matthias Schief ()
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Vesa-Matti Heikkuri: Tampere University
Matthias Schief: Economics Department, OECD

No 30, Working Papers from Finnish Centre of Excellence in Tax Systems Research

Abstract: We derive a novel decomposition of the Gini coefficient into within and between group inequality terms that sum to the aggregate Gini coefficient. This decomposition is derived from a set of axioms that ensure desirable behavior for the within and between-group inequality terms. The decomposition of the Gini coefficient is unique given our axioms, easy to compute, and can be interpreted geometrically.

Keywords: Gini; coefficient (search for similar items in EconPapers)
Pages: 55
Date: 2024-12
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Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research

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