What is the Gini coefficient simple definition?
The Gini index, or Gini coefficient, is a measure of the distribution of income across a population developed by the Italian statistician Corrado Gini in 1912. It is often used as a gauge of economic inequality, measuring income distribution or, less commonly, wealth distribution among a population.
What is the Gini index explain?
The Gini index (or coefficient) is a synthetic indicator that captures the level of inequality for a given variable and population. It varies between 0 (perfect equality) and 1 (extreme inequality). Between 0 and 1, the higher the Gini index, the greater the inequality.
How do you calculate Gini coefficient from income distribution?
The Gini coefficient can be calculated using the formula: Gini Coefficient = A / (A + B), where A is the area above the Lorenz Curve and B is the area below the Lorenz Curve.
What is meaning inequality of income distribution?
Income inequality is how unevenly income is distributed throughout a population. The less equal the distribution, the higher income inequality is. Income inequality is often accompanied by wealth inequality, which is the uneven distribution of wealth.
What should the Gini coefficient be?
The Gini coefficient ranges from 0, indicating perfect equality (where everyone receives an equal share), to 1, perfect inequality (where only one recipient or group of recipients receives all the income).
What does a Gini coefficient of 0.3 mean?
Gini index < 0.2 represents perfect income equality, 0.2–0.3 relative equality, 0.3–0.4 adequate equality, 0.4–0.5 big income gap, and above 0.5 represents severe income gap. The Gini Index is the indicator par excellence, used to measure the level of distribution of monetary income and derived from social inequality.
What is Gini coefficient in statistics?
The Gini coefficient is a statistic which quantifies the amount of inequality that exists in a population. The Gini coefficient is a number between 0 and 1, with 0 representing perfect equality and 1 perfect inequality. Sometimes these statistics are reported in terms of percentages, with numbers between 0 and 100.
What is the Gini Index and what it measures?
The Gini Index is a summary measure of income inequality. The Gini coefficient incorporates the detailed shares data into a single statistic, which summarizes the dispersion of income across the entire income distribution.
What is the difference between Gini index and Gini coefficient?
The Gini coefficient is a measure of inequality of a distribution. The Gini index is the Gini coefficient expressed as a percentage, and is equal to the Gini coefficient multiplied by 100. (The Gini coefficient is equal to half of the relative mean difference.)
What is income inequality?
1. Income Inequality. Income inequality is the extent to which income is distributed unevenly in a group of people. Income.
What is considered a high Gini coefficient?
Gini index < 0.2 represents perfect income equality, 0.2–0.3 relative equality, 0.3–0.4 adequate equality, 0.4–0.5 big income gap, and above 0.5 represents severe income gap.
Which country has the highest Gini coefficient?
According to their individual focused method, in the 108 countries they studied, South Africa had the world’s highest Gini coefficient at 0.62, Malaysia had Asia’s highest Gini coefficient at 0.5, Brazil the highest at 0.57 in Latin America and Caribbean region, and Turkey the highest at 0.5 in OECD countries.
What is a good Gini index?
According to econometrics, the ideal Gini coefficient lies between 0,25 and 0,40. This is because at a level where brain surgeons, rocket scientists and waiters all receive the same wage, there is no financial incentive to study physics or neuroscience.
What does Gini index measure?
“The Gini index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution.”. The Gini Index ranges from 0% to 100% or 0 to 1.
How does the Gini index work?
The Gini index is often represented graphically through the Lorenz curve , which shows income (or wealth) distribution by plotting the population percentile by income on the horizontal axis and cumulative income on the vertical axis.