Working Papers Home
2015 Working Papers
2014 Working Papers
2013 Working Papers
2012 Working Papers
2011 Working Papers
2010 Working Papers
2009 Working Papers
2008 Working Papers
2007 Working Papers
2006 Working Papers
2005 Working Papers
2004 Working Papers
2003 Working Papers
2002 Working Papers
2001 Working Papers
2000 Working Papers
Search All Papers
JEL Classification
Past Working Papers (Prior to 2000)
Office of Research
Home Page
Information on
Submitting a Paper
"The Small Sample Bias of the Gini Coefficient: Results and Implications for Empirical Research"
George Deltas
First Author :
George Deltas
Economics
University of Illinois at Urbana-Champaign
1206 S. Sixth Street, M/C 706
Champaign, IL 61820
USA
deltas@uiuc.edu
http://www.staff.uiuc.edu/~deltas/
Abstract :
The Gini coefficient is a downwardly biased measure of inequality in small populations when income is generated by one of three common distributions. The paper discusses the sources of bias and argues that this property is far more general. This has implications for (i) the comparison of inequality among sub-samples, some of which may be small, and (ii) the use of the Gini in measuring firm size inequality in markets with a small number of firms. The small sample bias has often lead to mis-perceptions about trends in industry concentration. A small sample adjustment results in a reduced bias which can no longer be signed as positive or negative. Finally, an empirical example illustrates the importance of using the adjusted Gini. In this example it is shown that, controlling for market characteristics, larger shipping cartels include a stochastically identical (in terms of relative size) set of firms as smaller shipping cartels.
Manuscript Received : 2000
Manuscript Published : 2000
This abstract has been viewed 2713 times.