RESEARCH PAPER NO. 776

DISTRIBUTIONAL LIMITS AND THE GINI COEFFICIENT

by

JUSTIN VAN DE VEN

JANUARY 2001

Department of Economics. University of Melbourne. Melbourne Victoria 3010 Australia

ABSTRACT

This paper examines the Gini (1912) coefficient of concentration using the framework set out by Dalton (1920) for evaluating a measure of inequality. Particular attention is paid to limited distributions and the associated concept of 'perfect inequality'. It is argued that a rescaled version of the Gini coefficient may be desirable for distributions that are subject to limits which depart from the standard assumption of non-negativity. A scaling parameter is derived and the rescaled Ginin coefficient is used to analyse the inequality of wealth in Australia.

 

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