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Thursday, July 29, 2021

CONTEXT: Vitalik Buterin—Is the Gini Coefficient Appropriate for Measuring Concentration of Asset Ownership?

The Gini coefficient is widely used as a measure of income or wealth distribution among a population. The higher the value, the more income or wealth is concentrated among a small fraction of the population. For example, using World Bank numbers, Mexico has a Gini value of 45.4, while Norway comes in at 27.0. But is Gini a meaningful or useful measure when applied to distribution of an asset, like cryptocurrency, in which concentration of ownership may be more a measure of interest than wealth? This thoughtful essay examines the question and argues that other measures are required in such circumstances.

Posted at July 29, 2021 11:42