Inequality Decomposition Analysis and the Gini Coefficient Revisited

Peter J Lambert and J Richard Aronson

Economic Journal, 1993, vol. 103, issue 420, 1221-27

Abstract: The Gini coefficient has long been thought unsuitable for inequality decomposition analysis because of a troublesome and little-understood residual term that occurs when subgroup income ranges overlap after the between-groups and within-groups contributions to inequality have been separated out. In this paper, graphical analysis is used to provide a solid understanding of the residual term as a subarea of the Lorenz diagram. Implications for inequality decomposition analysis are considered. Copyright 1993 by Royal Economic Society.

Date: 1993
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