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#13 - âž—Gini Coefficient, đź’˛Pricing Power

#13 - âž—Gini Coefficient, đź’˛Pricing Power
By Hari • Issue #13 • View online
Hi Friends,
This week I looked into 2 topics; Gini coefficient and Pricing Power.
The Gini Coefficient is a statistical measure of dispersion. It is an indication of the spread of data similar to standard deviation and variance. In economics, the Gini coefficient is used to represent the income inequality within a demographic.
This coefficient was developed by the Italian statistician Corrado Gini. The Gini Coefficient can be calculated for both continuous distributions and discrete data. Read more here.
Pricing power allows businesses to price their product or services higher than the rate of inflation and that of the competitors without reduced sales. Pricing power can come from a few ways. A very high quality product. A patented efficiency or feature of convenience that competitors cannot match. Or when a business is operating as a monopoly and barrier for entry is quite high.
A key indicator of the strength of a business is its pricing power That said, it does not mean that if a business does not have good pricing power it is a bad business. However, the opposite has a much higher probability to hold true. Read more here.

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