Individual Diversity and the Gini Decomposition

Working Paper 2014-321

Abstract

The paper defines the Gini index as the sum of individual contributions where individual contributions are interpreted as the degree of diversity of each individual from all other members of society. Among various possible forms of individual contributions to the Gini found in the literature, we show that only one form satisfies a set of desirable properties. This form can be used for decomposing the Gini into population subgroups. An illustration with UK data shows the use of this approach.

Authors: Lidia Ceriani, Paolo Verme.