On the Negative Bias of the Gini Coefficient due to Grouping
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The Gini coefficient is a measure of statistical dispersion that is commonly used as a measure of inequality of income, wealth or opportunity. Empirical research has shown that the coefficient may have a nonnegligible downward bias when data are grouped. It is unknown under which grouping conditions the downward bias occurs. In this note it is shown that the Gini coefficient strictly decreases if the data are partitioned into equal sized groups.
KeywordsStatistical dispersion Measure of inequality Inequality of income Inequality of wealth Grouping data
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