- #1

Vanadium 50

Staff Emeritus

Science Advisor

Education Advisor

2021 Award

- 28,050

- 12,578

What do I see as the shortcomings of Gini? By example: in Lower Slobovia, everyone has nothing. It's a perfectly equal society, so Gini = 0. In Upper Slobovia, on the other hand, everyone is wealthy - each citizen has exactly one million quatloos. Again, Gini = 0. Now, Upper and Lower Slobovia merge to form Greater Slobovia, and during this merger, each former Upper Slobovian gives 1/3 of his wealth to a corresponding Lower Slobovian. The result? Inequality actually goes up. Gini is now, if I did the math right, 0.17. But inequality in each former region is still zero.

The actual practical problem is when comparing a part of a polity with the whole: a city or state with the nation, or a single nation with "Europe". People do this comparison all the time, but as the example above shows it's not entirely valid. There's a sort of scale dependency.

It would also be helpful for an alternative also to have a clear and simple relationship between income inequality and wealth inequality - just as income and wealth have a clear relationship. (One being the derivative of the other)

Are there less flawed alternatives out there?