Econometrica Vol. 94 No. 1 2026

Subgroup Decomposition of the Gini Coefficient: A New Solution to an Old Problem

Vesa-Matti Heikkuri¹; Matthias Schief²

¹ Faculty of Management and Business, Tampere University · ² Economics Department, OECD

Abstract

We derive a novel decomposition of the Gini coefficient into within‐ and between‐group inequality terms that sum to the aggregate Gini coefficient. This decomposition is derived from a set of axioms that ensure desirable behavior for the within‐ and between‐group inequality terms. The decomposition of the Gini coefficient is unique given our axioms, easy to compute, and can be interpreted geometrically.

DOI

10.3982/ecta22145

Volume

94

Issue

1

Pages

169-192

Language

en

Sources

openalex crossref

Cite

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