Alternative measures of inequality indicate inequality has increased more than the Gini coefficient

Music City Center 

This talk describes two transforms of the Lorenz curve and related measures that are easy to understand and relate to older measures focusing on the lower and upper portions of the distribution, respectively. Reanalysis of US income data for 1993-2022 demonstrates that these measures are highly correlated with currently produced ones. Moreover, they can accommodate negative values, which occur in about one percent of income data and five to ten percent of wealth data. The U.S. Bureau of the Census regularly publishes measures, such as the mean log-deviation, but does not describe the procedures it uses. If the Bureau deletes negative incomes, it will under-estimate inequality. Applying the alternative measures to wealth data from the USA and UK indicates that wealth inequality in both nations has increased more than the corresponding percentage increase in the Gini coefficient. These results imply that policy makers may not appreciate the degree to which income and wealth inequality has increased in the last thirty years if they rely on trends in the Gini coefficient.

alternative measures of inequality

increase in income and wealth inequality

Gini coefficient 

Social Statistics Section