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Journal of Economic Interaction and Coordination

, Volume 14, Issue 4, pp 891–921 | Cite as

Mis-measurement of inequality: a critical reflection and new insights

  • Fabio Clementi
  • Mauro Gallegati
  • Lisa Gianmoena
  • Simone LandiniEmail author
  • Joseph E. Stiglitz
Regular Article
  • 152 Downloads

Abstract

This article documents that the Gini index is an insufficient measure of inequality and, according to the traditional logic of interpretation, that it may lead to incorrect deductions. Since, apart from concentration, it cannot grasp other relevant features of inequality like heterogeneity and asymmetry—which, beyond its intensity, allow for considering the direction of inequality too—we suggest using the less known Zanardi index of asymmetry of the Lorenz curve as an appropriate measure of inequality. Our findings are supported with estimates from the Luxembourg Income Study Database.

Keywords

Income inequality Gini index Concentration Lorenz curve asymmetry Zanardi index 

JEL Classification

C18 D31 D63 

Notes

Acknowledgements

The authors thank Bruce C. N. Greenwald for discussion. Views and opinions expressed in this article are those of the authors and do not necessarily reflect those of their institutions. The research did not received funding sources. The authors declare that they have no conflict of interest.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of Political Science, Communication and International RelationsUniversity of MacerataMacerataItaly
  2. 2.Department of ManagementPolytechnic University of MarcheAnconaItaly
  3. 3.Department of Economics and ManagementUniversity of Pisa56124Italy
  4. 4.IRES Piemonte, Socio-Economic Research Institute of PiedmontTurinItaly
  5. 5.Columbia Business SchoolColumbia UniversityNew YorkUnited States

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