Income Distribution Gini Coefficient

The coefficient ranges from 0 0 to 1 100 with 0 representing perfect equality and 1 representing perfect inequality.

Income distribution gini coefficient. The gini coefficient was proposed by gini as a measure of inequality of income or wealth. Growing interest in the analysis of interrelationships between income distribution and economic growth has recently stimulated new theoretical and empirical research. Income inequality among individuals is measured here by five indicators. In a country where everyone has the same income the gini coefficient would be 0.

The gini coefficient measures the distribution of incomes across income percentiles. The gini coefficient is one of the most frequently used measures of economic inequality. Thus 0 676 is the gini coefficient. Measures such as the head count ratio for the poverty index or the widely used gini coefficient are aggregated indicators describing the general extent of inequality without deeper insights into income distribution among households.

The gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive and it ranges between 0 in the case of perfect equality and 1 in the case of perfect inequality. It is used as a gauge of economic inequality measuring income distribution among a population. The gini coefficient sometimes called the gini index or gini ratio is a statistical measure of distribution intended to represent the income or wealth distribution of a nation. The coefficient can take any values between 0 to 1 or 0 to 100.

For oecd countries in the late 20th century considering the effect of taxes and transfer payments the income gini coefficient ranged between 0 24 and 0 49 with slovenia being the lowest and mexico the highest. It can be used to compare income inequality across different population sectors. For more information and methodology please see povcalnet. A coefficient of zero indicates a perfectly equal distribution of income or wealth gross domestic product gdp gross domestic product gdp is a standard measure of a country s economic health and an indicator of its standard of living.

For instance the gini index of urban areas in a country can be compared with rural areas. The gini coefficient was developed by italian statistician corrado gini in 1912 and is the most commonly used measurement of wealth or income inequality. Gini coefficient is used for analyzing wealth or income distribution. In other words it can be seen as the measure of inequality of income distribution in the society and its value lies in the range of 0 and 1 where the value of 1 indicates a higher degree of income inequality.

The term gini coefficient of a nation refers to the measurement of income distribution across the population of the nation.