A multidimensional Gini index

Abstract

This paper considers the problem of construction of a multidimensional Gini index (MGI) of relative inequality satisfying normatively acceptable conditions. One of the conditions considered is that of Correlation Increasing Majorization (CIM) which has been studied in the existing literature. A new condition called Weighting of Attributes under Unidirectional Comonotonicity (WAUC) is introduced. It requires that, in the case where the allocation of all attributes are comonotonic and attribute i is more unequally distributed than attribute j, a reduction of inequality of i is socially more beneficial than that of inequality of j. An MGI is constructed by taking each individual's well-being to be a weighted average of the attribute levels and applying the univariate Gini formula to the resulting vector of individual well-beings. The weights, same for all individuals, are determined by the attribute levels of all the individuals. It is shown that the suggested MGI satisfies both CIM and WAUC. The existing literature does not seem to contain any other MGI satisfying these two conditions simultaneously.Multidimensional inequality Gini index