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DECOMPOSITION AND NORMALIZATION OF ABSOLUTE DIFFERENCES, WHEN POSITIVE AND NEGATIVE VALUES ARE CONSIDERED:APPLICATIONS TO THE GINI COEFFICIENT

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Ostasiewicz K., Vernizzi A.

Metody Ilościowe w Badaniach Ekonomicznych

2017

vol. 18

issue 3

472-491

We show how the absolute differences approach is particularly effective to interpret the Gini coefficient (G) when a distribution includes both positive and negative values. Either in erasing units having negative values, or in transforming negative values into zero, a significant variability fraction can be lost. When including negative values, instead of correcting G, to maintain it lower than 1, the standard G should be kept to compare the variability among different situations; a recent normalization, Gp, can be associated to G, to evaluate the variability percentage inside each situation.

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1 Metody Ilościowe w Badaniach Ekonomicznych

1 Ostasiewicz K.

1 Vernizzi A.

1 2017

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DECOMPOSITION AND NORMALIZATION OF ABSOLUTE DIFFERENCES, WHEN POSITIVE AND NEGATIVE VALUES ARE CONSIDERED:APPLICATIONS TO THE GINI COEFFICIENT