Mis-measurement of inequality: a critical reflection and new insights

This article documents that the Gini index is an insufficient measure of inequality and, according to the traditional logic of interpretation, that it may lead to incorrect deductions. Since, apart from concentration, it cannot grasp other relevant features of inequality like heterogeneity and asymmetry - which, beyond its intensity, allow for considering the direction of inequality too - we suggest using the less known Zanardi index of asymmetry of the Lorenz curve as an appropriate measure of inequality. Our findings are supported with estimates from the Luxembourg Income Study Database.