On the capacity of the Gini index to represent income distributions

Yang Liu () and Joseph L. Gastwirth ()
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Yang Liu: George Washington University
Joseph L. Gastwirth: George Washington University

METRON, 2020, vol. 78, issue 1, No 7, 69 pages

Abstract: Abstract Almost all governmental and international agencies use the Gini index to summarize income inequality in a nation or the world. The index has been criticized because it can have the same value for two different distributions. It will be seen that other commonly used summary measures of inequality are subject to the same criticism. The Gini index has the advantage that it is able to distinguish between two distributions that have identical integer valued generalized entropy measures. Because no single measure can fully summarize a distribution, researchers should consider combining the Gini index with another measure appropriate for the topic being studied.

Keywords: Generalized entropy measures; Gini index; Lorenz curve; Measures of income inequality; Pareto distribution; Moment problem (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s40300-020-00164-8

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