Group averaging and the Gini deviation
Journal: RUDN Journal of Economics (Vol.29, No. 3)Publication Date: 2021-10-05
Authors : Oleg Pavlov; Olga Pavlova;
Page : 595-605
Keywords : Gini coefficient; Lorenz curve; Gini deviation;
Abstract
It is known that partitioning a society into groups with subsequent averaging in each group decreases the Gini coefficient. The resulting Lorenz function is piecewise linear. This study deals with a natural question: by how much the Gini coefficient could decrease when passing to a piecewise linear Lorenz function? Obtained results are quite illustrative (since they are expressed in terms of the geometric parameters of the polygon Lorenz curve, such as the lengths of its segments and the angles between successive segments) upper bound estimates for the maximum possible change in the Gini coefficient with a restriction on the group shares, or on the difference between the averaged values of the attribute for consecutive groups. It is shown that there exist Lorenz curves with the Gini coefficient arbitrarily close to one, and at the same time with the Gini coefficient of the averaged society arbitrarily close to zero.
Other Latest Articles
- Contribution of Lionel Robbins’ essay to economic psychology
- What’s happening to the locomotive of global economy, or The myths about the recovery of China
- Mali’s participation in the West Africa’s integration processes
- Trade facilitation: definition and current significance for economic development of Russia
- Problems of customs control over the movement of hazardous waste across the customs border of the Eurasian Economic Union
Last modified: 2021-10-05 18:50:56