2003/02/01 by George Deltas · 5 citations
Business, Management and Accounting · Economics, Econometrics and Finance · #Consumer Market Behavior and Pricing #Economic theories and models #Merger and Competition Analysis
paper · doi:10.1162/rest.2003.85.1.226
openalex publication_date 2003/02/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/30
The Gini coefficient is a downward-biased measure of inequality in small populations when income is generated by one of three common distributions. The paper discusses the sources of bias and argues that this property is far more general. This has implications for (i) the comparison of inequality among subsamples, some of which may be small, and (ii) the use of the Gini in measuring firm size inequality in markets with a small number of firms. The small-sample bias has often led to misperceptions about trends in industry concentration. A small-sample adjustment results in a reduced bias, which can no longer be signed. This remaining bias rises with the dispersion and falls with increasing skewness of the distribution. Finally, an empirical example illustrates the importance of using the adjusted Gini. In this example it is shown that, controlling for market characteristics, larger shipping cartels include a set of firms that is stochastically identical (in terms of relative size) to those of smaller shipping cartels.