Solved – Difference is summary statistics: Gini coefficient and standard deviation

descriptive statisticsginistandard deviation

There are several summary statistics. When you want to describe the spread of a distribution you can use for example the standard deviation or Gini coefficient.

I know that the standard deviation is based on central tendency, i.e. deviation from the mean, and the Gini coefficient a general measurement of dispersion. I also know that the Gini coefficient has a lower and upper bound [0 1], and the standard deviation does not. These properties are good to know but what insights can the standard deviation give that the Gini cannot and vise versa? If I had to choose to use one of the two, what are the advantages of using one compared to other when it comes to being informative and insightfulness.

Best Answer

Two things to consider

The Gini is scale independent whereas the SD is in the original units

Suppose we have a measure bounded above and below. SD takes on its maximum value if half measurements are at each bound whereas Gini takes on the maximum is one is at one bound and all the rest at the other.

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