Inequalities for the Gini coefficient of composite populations (Q761229): Difference between revisions

Unlike other popular measures of income inequality, the Gini coefficient is not decomposable, i.e., the coefficient G(\({\mathcal X})\) of a composite population \({\mathcal X}={\mathcal X}_ 1\cup...\cup {\mathcal X}_ r\) cannot be computed in terms of the sizes, mean incomes and Gini coefficients of the components \({\mathcal X}_ i\). In this paper upper and lower bounds (best possible for \(r=2)\) for G(\({\mathcal X})\) in terms of these data are given. For example, G(\({\mathcal X}_ 1\cup...\cup {\mathcal X}_ r)\geq \sum \alpha_ iG({\mathcal X}_ i)\), where \(\alpha_ i\) is the proportion of the population in \({\mathcal X}_ i\). One of the tools used, which may be of interest for other applications, is a lower bound for \(\int^{\infty}_{0}f(x)g(x)dx\) (converse to Cauchy's inequality) for monotone decreasing functions f and g.