The Zanga index in measuring income inequality

Document Type : Original Article

Authors

1 Assistance Professor, Department of Statistics, Payame Noor University

2 Professor in Statistics, Department of Statistics, Ferdowsi University of Mashhad

Abstract

This paper examines the new indicator of Zenga inequality, which is based on the ratio between the lower and the upper group means.  For analyzing this criterion, income data of Iranian households during the period of 1378-1396 was used. We evaluate the performance of the Gini and Zenga measures in analyzing household income data in comparison to each other. Within the comparison between the Gini and Zenga indices and related curves in household income data in Iran, we have observed the Zenga estimator has desirable properties than the Gini index. The Zenga curve is more explanatory and more flexible than the traditional Lorenz curve. The Zenga inequality index in the estimation of income inequality shows a similar trend for urban and rural areas relative to the Gini index. This indicates that the Zenga index is consistent with the Gini coefficient.

Keywords

Journal of Econometric Modelling
Volume 3, Issue 4
December 2018
Pages 113-133

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