The formal calculation of the Gini coefficient is as follows: (i) Find the difference in income between every possible pair in the population, (ii) Take the mean of these differences, (iii) Divide (ii) by the mean income of the population and (iv) The Gini coefficient is (iii) divided by 2. Consider a population with three members and an aggregate income of 100. Read the following statements and select the correct two.

Question

Accepted Answer

When the incomes are (100, 0, 0), the Gini coefficient is 1.

Accepted Answer

When the incomes are (50, 50, 0), the Gini coefficient is 0.5.

Answer

When the incomes are (60, 20, 20), the Gini coefficient is higher than 0.5.

Answer

When the incomes are (100/3, 100/3, 100/3), the Gini coefficient is 1.

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The formal calculation of the Gini coefficient is as follows: (i) Find the diffe...

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