Relations Between the Inequality Indices Gini, Pietra and Kolkata: Theory and Data Analysis

Abstract

We study relations between three inequality indices, namely the Gini ($g$), Pietra ($p$) and Kolkata ($k$) introduced in 1912, 1915 and 2014 respectively and all are derived from the Lorenz function $L(x)$ introduced in 1905. The Kolkata index (which corresponds to a fixed point of the complementary Lorenz function $L_c(x) \equiv 1-L(x)$) gives the fraction $k$ of wealth possessed by the richest $1-k$ fraction of people ($k$ = 0.8 corresponds to Pareto's 80-20 law from 1896). We show rigorously that while the Pietra index value $p$ should be greater than or equal to $2k-1$, the Robin Hood index should strictly be equal to the excess wealth fraction $2k-1$ possessed by the richest $1-k$ fraction of people. Our numerical data analysis for US IRS Income data (1983-2022), Bollywood (India) movie income data (1999-2024) and the citation inequalities across the publications by forty Nobel Laureates (2020-2025) in Economics, Physics, Chemistry and Medicine clearly show that $p/(2k-1)$ is always greater than unity but the deviation is never more than five percent. Assuming some simple analytic form for the Lorenz function, we also derived the relations $k = (1/2) + (3/8)g$ for small $g$ values and $p/g = 3/4$. However, by considering the Lorenz function appropriate for the generalized Pareto power law distribution, we obtain an extended range ($1_+ < p/g \leq e/2$) that captures most of the empirical data.