Template-Type: ReDIF-Paper 1.0 Author-Name:Vesa-Matti Heikkuri Author-Name-First: Vesa-Matti Author-Name-Last: Heikkuri Author-Email: vesa-matti.heikkuri@tuni.fi Author-Workplace-Name: Tampere University Author-Name: Matthias Schief Author-Name-First: Matthias Author-Name-Last: Schief Author-Email: matthias.schief@oecd.org Author-Workplace-Name: Economics Department, OECD Title: Subgroup Decomposition of the Gini Coefficient: A New Solution to an Old Problem 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. Length: 55 Creation-Date: 2024-12 Publication-Status: Published in FIT Working Paper Series, Finnish Center of Excellence in Tax Systems Research File-URL: https://verotutkimus.fi/verotutkimus/wp-content/uploads/2024/12/FIT-WP-30-Heikkuri-Schief-Gini-Decomposition-2.pdf File-Format: Application/pdf File-Function: First version, 2024 Number: 30 Classification-JEL: Keywords: Gini coefficient Handle: RePEc:fit:wpaper: 30