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Measuring and Explaining Economic Inequality: An Extension of the Gini Coefficient

C. Chameni Nembua (University of Yaoundé II, Cameroon)

Source Title: Econometric Methods for Analyzing Economic Development

DOI: 10.4018/978-1-4666-4329-1.ch006

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Abstract

This chapter proposes a new class of inequality indices based on the Gini coefficient (or index). The properties of the indices are studied and are found to be regular, relative, and to satisfy the Pigou-Dalton transfer principle. A subgroup decomposition is performed, and the method is found to be similar to the one used by Dagum when decomposing the Gini index. The theoretical results are illustrated by case studies, using Cameroonian data.

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2. Notation And Preliminaries

In this chapter, is a population with members. is a positive variable defined in and represents an income source distribution between the members of We denote by the values of on the members of respectively. We assume that is partitioned into subpopulations with, respectively, members. The value of on member number of is written as The restriction of in is written is the mean of in (in and represents the variance of in (in Also, is the square of the coefficient of variation of in