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How much does one learn about the state of inequality in a developing country by looking exclusively at the Gini coefficient
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How much does one learn about the state of inequality in a developing country by looking exclusively at the Gini coefficient? Introduction There has been considerable interest in inequality recently, due mainly to the fact that there seems to be positive relationship between equality and future growth (Persson & Tablellini [1994]). I have attempted to show in this essay what one can learn about the state of inequality in a developing country by looking at a measure of inequality - Gini coefficient. This work concentrates mainly on Gini coefficient measured in income space. This does not mean other spaces are not equally important; income is only part of the broader inequality problem. Indeed I stress the fact that ignoring other variables limits our understanding of the problem. Two factors seem to make income as an attractive variable to use for inequality analysis: 1. Much easier to measure compared to other variables 2. Having big...
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