Factor Components, Population Subgroups and the Computation of the Gini Index of Inequality

A simple technique based on matrix algebra is proposed to compute the Gini Index of Inequality; to obtain its decomposition by factor components when detailed data on income sources are available; to derive a breakdown of the inequality into, within, and between classes inequality when the income units are grouped by income range; and to compute the contribution of the within and between groups inequality, as well as that of some interaction term, when the data are classified by population subgroups.