Mis-measurement of inequality: a critical reflection and new insights

Fabio Clementi, Mauro Gallegati, Lisa Gianmoena (), Simone Landini () and Joseph Stiglitz
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Lisa Gianmoena: University of Pisa
Simone Landini: IRES Piemonte, Socio-Economic Research Institute of Piedmont

Journal of Economic Interaction and Coordination, 2019, vol. 14, issue 4, No 9, 921 pages

Abstract: Abstract This article documents that the Gini index is an insufficient measure of inequality and, according to the traditional logic of interpretation, that it may lead to incorrect deductions. Since, apart from concentration, it cannot grasp other relevant features of inequality like heterogeneity and asymmetry—which, beyond its intensity, allow for considering the direction of inequality too—we suggest using the less known Zanardi index of asymmetry of the Lorenz curve as an appropriate measure of inequality. Our findings are supported with estimates from the Luxembourg Income Study Database.

Keywords: Income inequality; Gini index; Concentration; Lorenz curve asymmetry; Zanardi index (search for similar items in EconPapers)
JEL-codes: C18 D31 D63 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (4)

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DOI: 10.1007/s11403-019-00257-2

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