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# RE: st: Ginis for negative net worth

 From "Nick Cox" To Subject RE: st: Ginis for negative net worth Date Mon, 5 Jul 2010 13:42:50 +0100

```Two points:

1. -inequal7- specifically warns you of zero or negative values. So, there is a strong flavour of caveat emptor to the indulgence.

2. There is no need for surmise or speculation about precisely what -inequal7- does as you can look at the code to find out. -viewsource inequal7.ado- gets you there.

Nick
n.j.cox@durham.ac.uk

Nora Müller

But inequal7 (as well as ineqdec0) says, that it uses values equal and
smaller than zero in calculating the gini coefficient and therefor I
thought that it already uses a special algorithm for such values so that
the range of the gini coefficients still is [0;1].

So finally I'll try to work with the absolte gini now.

Am 05.07.2010 13:01, schrieb Abdel Rahmen El Lahga:

> 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)

> 2010/7/5 Nora Müller<nora.mueller@uni-bamberg.de>:

>> 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?

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