European Journal of Business Science and Technology 2019, 5(1):21-29 | DOI: 10.11118/ejobsat.v5i1.160

Optimization of Gini Coefficient Affected by Imperfect Input Data

Petr David1
1 Mendel University in Brno, Czech Republic

Most indicators used for determining the distributional effects of taxes as well as the inequality in the income distribution are based on the Gini coefficient and the Lorenz curve to a substantial extent, although the potential application of the Gini coefficient itself is much larger. However, the Lorenz curve and in particular the Gini coefficient need not present precise information on income or the distribution of wealth in a society. The Gini coefficient values may be affected by the form of the input data. We have ascertained that the level of Gini coefficient distortion depends on the number of households included in the research given that the income distribution in the sample is unequal. In addition, we define the form of the Gini coefficient in light of the form of the input data.

Keywords: Gini coefficient, Lorenz curve, distribution, income, taxation
JEL classification: H22, H23

Published: August 31, 2019  Show citation

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David, P. (2019). Optimization of Gini Coefficient Affected by Imperfect Input Data. European Journal of Business Science and Technology, 5(1), 21-29. doi: 10.11118/ejobsat.v5i1.160
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