question

[mini999]

sir, how is the gini coefficient calculated in this question of dse 2012
Consider a society in which half the population earns
100 rupees per day and the other half earns 200 rupees per day. The Gini
coefficient of inequality for this society is given by
(a) 1/2
(b) 1/3
(c) 1/6
(d) 1/8

[pbansal]

ans is 1/6, assume we are talking abt 8 individuals , 4 in each group .hence the distribution could be writen as
100,100,100,100...,200,200,200,200
now  positive differences between their incomes is 100, since we are taking positive difference we don't need to divide by 2 as we do in our formula
now ., our formula becomes= n1.n2 .  positive differences / n^2.u
here u=150,mean of incomes
 you get 100*4*4/150*8^2=1/6
8= total number of individuals and as per formula we square it

[Sumit]

Hi Pbansal,
 could you suggest which book to refer for gini coeffient????? n from where I can practice question on it???
Thnks in advance.

[pbansal]

there are certain questions on gini coeff. in sc gupta ch 6 and also in debraj ray ch 8.
i v also seen these ques in jnu papers

[Sumit]

thanks for prompt reply.

[maahi]

my ans. is 1/3 , why is it 1/6 ?

can u explain what is gini coefficient and explain its formula ?

[pbansal]

read sc gupta/ debraj ray for that formula, u l get 1/6

[maahi]

i hv read it and i m still nt able 2 get it . btw why have you not divided d difference by 2 ?

[pbansal]

it is divided by only when u apply modulus but i have taken the sum of positive differences only .for example-
take no:s 1,2,3
positive differences are
3-2=1,3-1=2,2-1=1 and then take their sum

[maahi]

thanks:-)