Mean-Gini dominance in decision analysis

The use of Gini’s mean difference as a criterion in decision analysis is reviewed. The interval of risk aversion that is appropriate to the use of mean-Gini stochastic efficiency criterion, in terms of the Pratt-Arrow coefficient, is found to be dependent on the distributional form of the risk prospects considered and on the extent to which they overlap. The exact size of the risk interval is derived for prospects distributed rectangularly and triangularly, and an approximate interval is derived for prospects distributed normally.