The Gini coefficient Basic conditions for measurement of inequality - - PowerPoint PPT Presentation

The Gini coefficient

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Basic conditions for measurement of inequality

• Measures of (relative) inequality have to satisfy the

following principles:

• The Pigou-Dalton principle of transfers
• The principle of scale invariance

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1 2 average of all pairwise income differences G mean income       

     

 

3 2 3 1 2 1 1 2 3

1 3 1 2 3 X X X X X X G X X X            

Example