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A Paradox for Inequality Indices

Working Paper 2020-559

Abstract

This paper identifies a paradox for inequality indices which is similar to the well known Simpson’s paradox in statistics. For the Gini and Bonferroni indices, concrete examples of the paradox are provided and general methods are described for obtaining examples of the paradox for arbitrary sizepopulation.

Authors: Satya Chakravarty, Palash Sarkar.

Keywords: inequality, paradox, Gini index, Bonferroni index, Simpson’s paradox
JEL: C43, D31, D63, O15