Glossary of economics research
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Gini index:
A number between zero and one that is a measure of inequality. An example is
the concentration of suppliers in a market or industry.
The Gini index is the ratio of the area under the Lorenz curve to the area
under the diagonal on a graph of the Lorenz curve, which is 5000 if both axes
have percentage units. The meaning of the Gini index: if the suppliers in a
market have near-equal market share, the Gini index is near zero. If most of
the suppliers have very low market share but there exist one or a few supplies
providing most of the market share then the Gini index is near one.
In labor economics, inequality of the wage distribution can be discussed in
terms of a Gini index, where the wages of subgroups are fractions of the total
wage bill.
The Gini index is sometimes called the Gini coefficient.
Source: Greer, 1992, p 174
Contexts: IO; labor
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