THE GINI COEFFICIENT. DECOMPOSITION AND OVERLAPPING
AbstractThe purpose of this paper is to present the process of decomposition and its relation to the Gini
coefficient with emphasis on the explanation of the nature of the overlapping component (or interaction effect)
which arises during decomposition and it is usually treated as an awkward by-product of this process. It is shown
that exact decomposition without the presence of the overlapping effect is possible even when group income
distributions are overlapping under condition that data on individual incomes are available. The problem is purely
mathematical and it arises when decomposition is accompanied by replacement individual income comparisons
with differences in mean group income between pairs of groups. In this case, the overlapping component can be
completely separated from the other two, the “within” and “between” inequality components. Furthermore, the
case of grouped data is considered that does not allow exact separation of the component.
The Copyright Transfer Form to ASERS Publishing (The Publisher)
This form refers to the manuscript, which an author(s) was accepted for publication and was signed by all the authors.
The undersigned Author(s) of the above-mentioned Paper here transfer any and all copyright-rights in and to The Paper to The Publisher. The Author(s) warrants that The Paper is based on their original work and that the undersigned has the power and authority to make and execute this assignment. It is the author's responsibility to obtain written permission to quote material that has been previously published in any form. The Publisher recognizes the retained rights noted below and grants to the above authors and employers for whom the work performed royalty-free permission to reuse their materials below. Authors may reuse all or portions of the above Paper in other works, excepting the publication of the paper in the same form. Authors may reproduce or authorize others to reproduce the above Paper for the Author's personal use or for internal company use, provided that the source and The Publisher copyright notice are mentioned, that the copies are not used in any way that implies The Publisher endorsement of a product or service of an employer, and that the copies are not offered for sale as such. Authors are permitted to grant third party requests for reprinting, republishing or other types of reuse. The Authors may make limited distribution of all or portions of the above Paper prior to publication if they inform The Publisher of the nature and extent of such limited distribution prior there to. Authors retain all proprietary rights in any process, procedure, or article of manufacture described in The Paper. This agreement becomes null and void if and only if the above paper is not accepted and published by The Publisher, or is with drawn by the author(s) before acceptance by the Publisher.