A Note on the Relationship between Top Income Shares and the Gini Coefficient

Facundo Alvaredo

No 8071, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: When a very top group of the income distribution, infinitesimal in numbers, owns a finite share S of total income, the Gini coefficient G can be approximated by G*(1 - S) + S, where G* is the Gini coefficient for the rest of the population. We provide a simple formal proof for this expression, give a general formula of the relationship when the top group is not infinitesimal, and offer two applications as illustrations.

Keywords: Pareto distribution; Top income shares; Gini coefficient (search for similar items in EconPapers)
JEL-codes: D31 H2 (search for similar items in EconPapers)
Date: 2010-10
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Citations: View citations in EconPapers (6)

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Journal Article: A note on the relationship between top income shares and the Gini coefficient (2011)
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