what are gini coefficients?

Charles Brown CharlesB at CNCL.ci.detroit.mi.us
Fri Aug 18 12:09:16 PDT 2000


Hello prof. . What's up , doc ?

>>> rosserjb at jmu.edu 08/18/00 02:29PM >>>

No, no, no! There are very big differences in the degree of income inequality around the world. Brazil (and South Africa, not on Branko's list) really are much more unequal than Slovakia. Russia (and Georgia) have become much more unequal than they used to be. Everybody knows this and these facts do show up in the data, despite some disagreements about details.


CB: When you say "very big differences" , what is the size of the neighborhood of the range of these differences relative to universe of potential distributions of wealth ? Is there are larger picture in which these differences seem small in comparison with an overall consistent concentration of wealth ?


Again, the Pareto curve discussion says that there is a similarity to the shape or pattern of inequality everywhere.


CB: Isn't this similarity potentially an empirical reflection of somekind of law of capitalist development ? Sounds like a kind of law of monopolization, concentration in discrete segments or strata of wealth. The variation in the specific shapes of capitalism around the world might even explain some.. no let me stop. too unempiricist there.

What countries did Pareto use ?

Anyway, what if we just stick with the U.S. for a moment. How consistent is the Pareto or 80-20 or Gini ratio for the U.S. for the last 100 years ? Seems I am always hearing reports that , somehow, remarkably, 5% at the top own the same disproportionately higher amount than 5% of the whole as in 1900. I take it as an axiom that 5% at the top own more than 5%, but for the ratios to remain the same is a thinglike fact, suggests a precision which is natural science-like, a law in the scientific not legal sense ( although state statutes might contribute to its consistency) _______________

But, that similarity can fit very different degrees of inequality. Is the second richest person 99% as rich as the first or only 10% as rich? Either of those are consistent with a Pareto type distribution, but each implies a very different pattern of inequality.


CB: We would be talking about an abstract law which would fit a concrete array of different situations, a unity in diversity.

-----Original Message----- From: Charles Brown <CharlesB at CNCL.ci.detroit.mi.us> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com> Date: Friday, August 18, 2000 11:00 AM Subject: Re: what are gini coefficients?

>The thing that struck me about the Gini curves on the LBO website example
is that they were so close together. Then there is this discussion around here that Pareto or somebody and others have demonstrated that the income distribution/dispersion/inequality is and has been very close over a the long run ( or is that a joke ?).
>It would seem like the interesting thing about income distribution is that
it doesn't change, suggesting none other than a scientific law at work.
>>>> dhenwood at panix.com 08/17/00 07:15PM >>>
>Jim heartfield wrote:
>>At the risk of boring those in the know, I would love to know what the
>>methodology of the gini coefficient is? Gini was the name of a soft
>>drink here, that never quite took off (somewhere between sprite and
>>fizzy water). I've always assumed that it was some measure of relative
>>poverty (as opposed to absolute) but that's as much as I know.
>>Most of all I've noticed that conventional economics is very much at
>>home with gini coefficients,
>It's not something that troubles most economists, only income & poverty
>> in a way that it never was about old-
>>fashioned inequality - something about mathematics makes it all sound so
>>technical and impersonal.
>If you want that, you refer to "income dispersion" rather than
>> I guess that this is a measure of
>>distributional inequality rather than one of social power.
>Distributional inequality isn't unrelated to social power, is it?

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