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From |
Conor Hughes <cbhughes@uchicago.edu> |

To |
statalist@hsphsun2.harvard.edu |

Subject |
Re: st: Ginis for negative net worth |

Date |
Mon, 5 Jul 2010 06:21:46 -0500 |

Hi Nora, The general formula for the Gini index 1 - 2*int_0^1 Y(x)dx, where Y(x) is your Lorenz curve. The only way this can be greater than 1 is if the integral is negative. So, in your case, the Gini isn't really appropriate, since 1 is defined as perfect inequality. Anything greater than 1 will make most economists very uncomfortable. You should take a look at this paper by Andreas Stich in the journal Statistical Methods and Applications (Volume 5, Number 3) called "Inequality and negative income." I think it will give you some helpful ideas for dealing with this. Cheers, Conor On Mon, Jul 5, 2010 at 6:01 AM, Abdel Rahmen El Lahga <rahmen.lahga@gmail.com> wrote: > > Nora, > Gini index as well as other inequality indices are defined for > positive outcomes and can not applied for negatives observations. > You have two alternatives: > 1) use a trick (not so popular) proposed by Chen et al. (1982) in > oxford economic paper (1982) page 473-478 (See also the comment by > Berrebi and Silber in the same journal (1985 page 525-526) to deal > with negative outcomes > 2) You can use absolute gini index to avoid problems caused by > negative income (but you should care about different ethical > judjements associated to absolute view of inequality) > HTH > AbdelRahmen > > 2010/7/5 Nora Müller <nora.mueller@uni-bamberg.de>: > > Dear All, > > > > I'm trying to calculate the gini coefficient for net worth (= financial > > assets + real assets - debts) that has some negative values. > > I do this using the command "inequal7" written by Philippe Van Kerm. > > > > I'm doing an international comparison and for Poland I get a Gini that is > > 1.15. Can anyone help me with the interpretation? > > Why can there be a gini greater than one? > > > > Thanks for your consideration, > > Nora > > > > > > -- > > ********************************************* > > Nora Müller, Dipl.-Soz. > > > > Faculty for Social and Economic Sciences > > Chair of Sociology I > > Otto-Friedrich-University Bamberg > > > > Fakultät Sozial- und Wirtschaftswissenschaften > > Lehrstuhl Soziologie I > > Otto-Friedrich-Universität Bamberg > > Wilhelmsplatz 3 > > 96047 Bamberg > > > > Raum: 229 > > Tel. +49-951-863 3909 > > Fax. +49-951-863 2597 > > Email: nora.mueller@uni-bamberg.de > > www: http://www.uni-bamberg.de/sowi/soziologie-i/ > > > > http://gif-project.soziologie-blossfeld.de > > ********************************************* > > * > > * For searches and help try: > > * http://www.stata.com/help.cgi?search > > * http://www.stata.com/support/statalist/faq > > * http://www.ats.ucla.edu/stat/stata/ > > > > > > -- > AbdelRahmen El Lahga > > * > * For searches and help try: > * http://www.stata.com/help.cgi?search > * http://www.stata.com/support/statalist/faq > * http://www.ats.ucla.edu/stat/stata/ -- Conor Hughes Mathematics and Economics University of Chicago 2011 * * For searches and help try: * http://www.stata.com/help.cgi?search * http://www.stata.com/support/statalist/faq * http://www.ats.ucla.edu/stat/stata/

**References**:**st: Ginis for negative net worth***From:*Nora Müller <nora.mueller@uni-bamberg.de>

**Re: st: Ginis for negative net worth***From:*Abdel Rahmen El Lahga <rahmen.lahga@gmail.com>

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