It was developed by the italian statistician and sociologist corrado gini and published in his 1912 paper. Calculating gini coefficient of world income inequality. Is the observed difference in the the gini coefficient a real reduction in inequality in income distribution or is it only due to sampling variations. While a perfect scenario would be that of equality in income distribution, this is not normally the case in most of the areas around the world. Decomposition of the gini coefficient using stata alejandro lopezfeldman. We represent the number of observations for each experimental unit as m k, k 1, n. The gini coefficient is widely used to measure inequality in the distribution of income, wealth, expenditures, etc. The lowest 10% of earners make 2% of all wages the next 40% of earners make 18% of all wages the next 40% of earners make 30% of all wages the highest 10% of earners make 50% of all wages. Now you can define a scaleinvariant version of the standard deviation, by dividing by the mean coefficient of variation. To do this in a stata session, type ssc desc somersd for a brief description, and ssc install somersd, replace to install the package, and net get somersd to copy the 3. Calculating the gini coefficient from lis data in stata. Use excel to produce the lorenz curve and calculate gini coefficient.
The gini coefficient is calculated as twice the area between the roc curve and the diagonal, or as gini 2auc 1. For more information and methodology, please see povcalnet. Gini coefficient and the lorentz curve file exchange. There are three reasons at least for the discrepancy, which make the nzis a poor choice for. Stata program atkinson, inequal, lorenz, relsgini these four adofiles provide a variety of measures of inequality. In my case, i want to calculate the gini coefficient of disease rates across geographic areas, so this calculation would need to take into account both the number of cases of disease. Estimating the empirical lorenz curve and gini coefficient. I havent used the gini coefficient in the last 25 years, so i cant give more complete advice.
Stata module to compute gini index with within and betweengroup inequality decomposition. The name gini coefficient is a moniker for a large family of variations on the basic inequality measure, but the standard interpretation is that of the ratio of the area under the lorenz curve a function of the cumulative distribution to that of the line of perfect equality. The range of the gini coefficient goes from 0 no concentration to v\fracn1n maximal concentration. Statistical software components s456814, department of economics. Dear statalisters i use stata to calculate the gini coefficient and i found this command somersd, but actually i dont know how to do the. I know that most of the time people use time series crosssectional models to compute a correlation between a gini coefficient and a discussion topic. Income inequality in the philippines, as measured by the gini coefficient, declined from 46. Or is there any other easy way to compute only the gini coefficients in stata with such by options. If a 0, it means the lorenz curve is actually the line of equality. Jun 30, 2010 the gini coefficient is a measure of the inequality of a distribution often used for income or wealth distributions. Roger aliagadiaz and silvia montoya additional contact information silvia montoya. A program you havent mentioned is somersd, which can also be used to calculate gini coefficients, and can be downloaded from ssc. Hence, the gini coefficient computes the difference between all available income pairs in the data and calculates the total of all absolute differences.
A lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the. I am currently using a userwritten command called fastgini. Stata provides ado files that will calculate the gini coefficient as well as several other. However, american factfinder no longer exists you will need to access the data through the us census site, and it is a navigational nightmare. Measure of the deviation of the distribution of income among individuals or households within a country from a perfectly equal distribution. This module should be installed from within stata by typing ssc install descogini. Data analysis with stata 12 tutorial university of texas. Statistical software components from boston college department of economics. I am wondering whether the stata has an official command for this. A value of 0 represents absolute equality, a value of 100 absolute inequality.
Thus a gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. The gini coefficient is a measure of the inequality of a distribution often used for income or wealth distributions. Gini coefficient measures the inequality of wealth distribution or income inequality in a particular area. Gini index measures the extent to which the distribution of income or, in some cases, consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution.
Suppose that n observations patient visits are dispersed among n experimental units physicians. In this case, the gini coefficient is 0 and it means there is perfect distribution of income everyone earns the same amount. The gini coefficient is a measure of inequality of incomes or sometimes wealth across individuals a score of 0 on the gini coefficient represents complete equality, i. The gini coefficient is a measure of inequality of incomes or sometimes wealth across individuals. Stata module to compute gini index with within and betweengroup inequality decomposition, statistical software components s372901, boston college department of economics. Spss macro for computing gini coefficient of inequality. Darkwah ka, nortey enn, lotsi ca 2016b a proposed numerical integration method using polynomial interpolation. Our interest lies in studying the concentration or distribution of a feature of each of the n observations across the n members. There are many userwritten programs calculating gini coefficients.
Notes on how to compute gini coefficient suppose you are given data like this. Aaron, quick question about your gini coefficient calculation in tableau. Stata module to perform gini decomposition by income source, statistical software components s456001, boston college department of economics, revised 22 sep 2008. Estimating lorenz and concentration curves in stata. By decomposing this measure you can better understand the determinants of inequality. The gini coefficient is always between 0 and 1, with a higher number representing a better classifier. They estimated the gini coefficient based on either enrollment or education finance.
A score of 0 on the gini coefficient represents complete equality, i. Thanks for help momo, you may be interested in adept. Income inequality among individuals is measured here by five indicators. Learn more calculating the gini coefficient from lis data in stata. She asked if i know a stata command that tests the significance between the difference of two gini coefficients. In this context members of the population are ranked in terms of their wealth and the cumulative wealth is plotted on the yaxis against the cumulative proportion of the population on the xaxis. The gini coefficient ranges between 0 and 1 or it can also be expressed as a number from 0 to 100 and is given by the ratio of the areas.
In this paper i present a new stata command called lorenz that estimates lorenz and. According to a lis training document, the stata code to do this is. The gini coefficient as a measure of software project risk. The gini coefficient is negative in the unlikely event that the roc curve is below the diagonal. The gini index measures the area between the lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. In your example, you are calculating the gini coefficient of sales a single variable. Applied econometrics at the university of illinois. They present two methods direct and indirect for calculating an education gini index, and generate a quinquennial data set on education gini indexes for the over15population in. Stata module to compute gini index with within and. I am trying to compute gini coefficient for groups in a single table to demonstrate inequality among several groups based on consumption or other variables. How can we calculate the gini index of an income distribution. Stack overflow for teams is a private, secure spot for you and your coworkers to find and share information. This module should be installed from within stata by typing ssc install fastgini. Gini index world bank estimate world bank, development research group.
Where can i find the gini coefficient of all us counties. Generalized gini and concentration coe cients with factor decomposition in stata philippe van kerm cepsinstead, luxembourgz september 2009 revised february 2010 abstract sgini is a userwritten stata package to compute generalized gini and concentration coe cients. Data analysis with stata 12 tutorial university of texas at. It was developed by the italian statistician and sociologist corrado gini and published in his 1912. To numerically present this, you can ask stata for the skew and kurtosis statistics, including pvalues, as we did in section 3. Sep 02, 2012 stata program atkinson, inequal, lorenz, relsgini these four adofiles provide a variety of measures of inequality. For example statistics new zealand via the oecd report a gini coefficient of 0. Data are based on primary household survey data obtained from government statistical agencies and world bank country departments. This command decomposes the gini coefficient by income source using the approach described in lerman and yitzhaki 1985 and in stark, taylor and yitzhaki 1986. I am writing a stata package, which involves using calculating the gini index. Does anyone have idea how to compute gini coefficient for groups. The gini index or gini coefficient is a statistical measure of distribution developed by the italian statistician corrado gini in 1912. I am trying to compute gini coefficient for groups in a single table to demonstrate inequality among several groups based.
Mar 15, 2019 this feature is not available right now. Estimating lorenz and concentration curves in stata ben jann institute of sociology university of bern ben. I had seen the command inequal but this doesnt have a by option. The lorenz curve is a graphical statistic that was first introduced in 1905 as a tool for exhibiting the concentration of wealth in a population. Standard deviations and gini coefficients are often chosen as measures of inequality. Sampling distribution of gini coefficient rbloggers. Momo, if you are interested in decomposition by sources you could also use descogini alejandro 2010 11 19 sergiy radyakin. We will suggest some basic methods to calculate the hill estimator, the lorenz curve, and the gini coefficient. The command is available online for installation in netaware stata.
Abstract the authors use a gini index to measure inequality in educational attainment. Darkwah ka, nortey enn, mettle fo, baidoo i 2016a a study of the estimation of the gini coefficient of income using lorenz curve. I need to calculate the gini coefficient from disposable personal income data at lis. The bias corrected gini coefficient goes from 0 to 1. Jul 28, 2016 darkwah ka, nortey enn, mettle fo, baidoo i 2016a a study of the estimation of the gini coefficient of income using lorenz curve. If you type, in stata, findit lorenz then you will find a choice of programs to plot a lorenz curve. Estimating the empirical lorenz curve and gini coefficient in.
A score of 1 would represent complete inequality, i. Generalized gini and concentration coefficients with factor. How can i change the number of decimals in statas output. Calculating gini coefficient of worldincome inequality with stata replicating and extending arrighidrangel findings with stata software related issues.
This note describes syntax, formulas and usage examples. I mean, without decomposing into within and between groups, i want to estimate only the gini with the by option. Groupvar is a categorical variable not string who determines the subgroups in which the population will be divided. We will also compare income inequality using one of the most popular and longstanding inequality measures, the gini coefficient. The gini coefficient is invariant to scale and is bounded, the standard deviation invariant to a shift, and unbounded, so they are difficult to compare directly. The software is available free of charge from the world banks site. I would like to compute the correlation between the increasing of the gini coefficient and the percentage a certain topic is discussed in the public. The gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, and it ranges between 0 in the case of perfect equality and 1 in the case of perfect inequality. Calculating gini coefficient of world income inequality with. To quantify this, john calculated the gini coefficient for the r project, where the inequality metric was based on the number of commits per core team member extracted from the r svn logs. The small sample variance properties of the gini coefficient are not known, and large sample approximations to the variance of the coefficient are poor mills and zandvakili, 1997. A friend asked me a question related to this weeks ago. However, from your description, you can can get such a sum without a macro by. Standard divisions of school attainment were used in a few studies.
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