What does a Gini of 0.5 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.
What is a good Gini value?
Relative to a Gini coefficient of 0, income or wealth is distributed quite equally. A coefficient between 0.3–0.4 indicates that there is adequate equality.
What does a Gini coefficient of 0.45 mean?
A country with a Gini Coefficient of 0.4 is “like, very unequal but still basically functional”, and a country with a Gini of 0.45 is best described as “a bit more unequal than that other country I just mentioned. Basically like Peru, according to the latest World Bank figures.
Is a higher or lower Gini better?
Note that the lower the Gini the better the split. In other words the lower the likelihood of misclassification.
What is a low Gini coefficient?
A Gini coefficient of zero means there is an equal distribution of income, whereas a number closer to one indicates greater inequality. The lower the Gini coefficient, the more equal the society is said to be.
What is a high Gini coefficient?
The Gini index is a measure of the distribution of income across a population. A higher Gini index indicates greater inequality, with high-income individuals receiving much larger percentages of the total income of the population.
What does a Gini coefficient of 0.6 mean?
Definition. The Gini coefficient is usually a number between 0 and 1 (or 0 to 100). 0 means a country where the income is equally distributed. On the other hand, 1 means that one person owns everything but the rest owns nothing. In reality, all scores are between 0.25 and 0.6 (between 25 and 60 on the 0 to 100 scale).
How do you interpret Gini coefficient?
Another way of thinking about the Gini coefficient is as a measure of deviation from perfect equality. The further a Lorenz curve deviates from the perfectly equal straight line (which represents a Gini coefficient of 0), the higher the Gini coefficient and the less equal the society.
What does a Gini coefficient of 1 mean?
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).
Who has the lowest Gini coefficient?
Countries with the highest and lowest Gini coefficients. South Africa ranks as the country with the lowest level of income equality in the world, thanks to a Gini coefficient of 63.0 when last measured in 2014. That said, in 2005, the Gini coefficient was even higher, at 65.0.
What is high Gini impurity?
Properties of Gini impurity Here Gini denotes the purity and hence Gini impurity tells us about the impurity of nodes. Lower the Gini impurity we can safely infer the purity will be more and hence a higher chance of the homogeneity of the nodes.
What is a good Gini impurity?
Gini impurity has a maximum value of 0.5, which is the worst we can get, and a minimum value of 0 means the best we can get.
What does a Gini coefficient of 0.6 mean?
Definition. The Gini coefficient is usually a number between 0 and 1 (or 0 to 100). 0 means a country where the income is equally distributed. On the other hand, 1 means that one person owns everything but the rest owns nothing. In reality, all scores are between 0.25 and 0.6 (between 25 and 60 on the 0 to 100 scale).
What does a Gini coefficient of 1 mean?
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).
How do you interpret Gini coefficient?
Another way of thinking about the Gini coefficient is as a measure of deviation from perfect equality. The further a Lorenz curve deviates from the perfectly equal straight line (which represents a Gini coefficient of 0), the higher the Gini coefficient and the less equal the society.
What country has the lowest Gini coefficient?
South AfricaCountries with the highest and lowest Gini coefficients. South Africa ranks as the country with the lowest level of income equality in the world, thanks to a Gini coefficient of 63.0 when last measured in 2014.
What is the Gini coefficient?
Gini Coefficient is also known as the Gini index is the statistical measure which is used in order to measure the distribution of the income among the population of the country i. e., it helps in measuring the inequality of income of the country’s population. It is a value between 0 and 1.
How to calculate Gini coefficient?
Calculate the Gini coefficient using the formula: = 1 – Sum
What does a value of 0 mean?
A value of 1 indicates the highest degree of income inequality where a single individual earns the entire income of the country. A value of 0 indicates that all individuals have the same income. Thus, a value of 0 indicates perfect income equality. One of the limitations of the Gini index is that its use requires that no one has negative net wealth.
What does 0 mean in the Gini index?
A value of 0 indicates that all individuals have the same income. Thus, a value of 0 indicates perfect income equality. One of the limitations of the Gini index is that its use requires that no one has negative net wealth.
Can Gini index be used to find income inequality?
Similarly, the Gini index of one country can be compared to that of another. It can also be used to find income inequality over a period of time. For instance, the Gini coefficient in India in the year 2000 can be compared with the coefficient of 2019. This coefficient can be used along with GDP numbers.
What is Gini coefficient?
In economics, the Gini coefficient ( / ˈdʒiːni / JEE-nee ), sometimes called the Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income inequality or wealth inequality within a nation or any other group of people. It was developed by the Italian statistician and sociologist Corrado Gini .
How to approximate Gini coefficient?
In that case, the Gini coefficient can be approximated by using various techniques for interpolating the missing values of the Lorenz curve. If ( Xk, Yk) are the known points on the Lorenz curve, with the Xk indexed in increasing order ( Xk – 1 < Xk ), so that:
What is the Gini coefficient of the richest 20%?
The proverbial case where the richest 20% have 80% of all income (see Pareto principle) would lead to an income Gini coefficient of at least 60% .
How is Shorrocks index calculated?
Shorrocks index is calculated in number of different ways, a common approach being from the ratio of income Gini coefficients between short-term and long-term for the same region or country.
What is the Gini coefficient of a high income group?
If the high income group is a proportion u of the population and earns a proportion f of all income, then the Gini coefficient is f − u . An actual more graded distribution with these same values u and f will always have a higher Gini coefficient than f − u .
Why is Gini coefficient important?
The Gini coefficient is a relative measure. It is possible for the Gini coefficient of a developing country to rise (due to increasing inequality of income) while the number of people in absolute poverty decreases. This is because the Gini coefficient measures relative, not absolute, wealth. Changing income inequality, measured by Gini coefficients, can be due to structural changes in a society such as growing population (baby booms, aging populations, increased divorce rates, extended family households splitting into nuclear families, emigration, immigration) and income mobility. Gini coefficients are simple, and this simplicity can lead to oversights and can confuse the comparison of different populations; for example, while both Bangladesh (per capita income of $1,693) and the Netherlands (per capita income of $42,183) had an income Gini coefficient of 0.31 in 2010, the quality of life, economic opportunity and absolute income in these countries are very different, i.e. countries may have identical Gini coefficients, but differ greatly in wealth. Basic necessities may be available to all in a developed economy, while in an undeveloped economy with the same Gini coefficient, basic necessities may be unavailable to most or unequally available, due to lower absolute wealth.
What countries have the highest Gini coefficient?
For OECD countries over the 2008–2009 period, the Gini coefficient (pre-taxes and transfers) for a total population ranged between 0.34 and 0.53, with South Korea the lowest and Italy the highest. The Gini coefficient (after-taxes and transfers) for a total population ranged between 0.25 and 0.48, with Denmark the lowest and Mexico the highest. For the United States, the country with the largest population of the OECD countries, the pre-tax Gini index was 0.49, and the after-tax Gini index was 0.38, in 2008–2009. The OECD averages for total populations in OECD countries was 0.46 for the pre-tax income Gini index and 0.31 for the after-tax income Gini index. Taxes and social spending that were in place in 2008–2009 period in OECD countries significantly lowered effective income inequality, and in general, "European countries—especially Nordic and Continental welfare states —achieve lower levels of income inequality than other countries."
What is the Gini coefficient of a country?
A country in which every resident has the same income would have an income Gini coefficient of 0. A country in which one resident earned all the income, while everyone else earned nothing, would have an income Gini coefficient of 1.
What Is the Gini Index?
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. The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality. Values over 1 are theoretically possible due to negative income or wealth.
How to find the Gini coefficient for Haiti in 2012?
To estimate the income Gini coefficient for Haiti in 2012, we would find the area below its Lorenz curve: around 0.2. Subtracting that figure from 0.5 (the area under the line of equality), we get 0.3, which we then divide by 0.5. This yields an approximate Gini of 0.6 or 60%. The CIA gives the actual Gini for Haiti in 2012 as 60.8% (see below). This figure represents extremely high inequality; only Micronesia, the Central African Republic, South Africa, and Lesotho are more unequal, according to the CIA.
How to find Gini index?
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. The Gini coefficient is equal to the area below the line of perfect equality (0.5 by definition) minus the area below the Lorenz curve, divided by the area below the line of perfect equality. In other words, it is double the area between the Lorenz curve and the line of perfect equality.
Why is the Gini index overstated?
Because of data and other limitations, the Gini index may overstate income inequality and can obscure important information about income distribution.
What is informal economic activity?
Informal economic activity tends to represent a larger portion of true economic production in developing countries and at the lower end of the income distribution within countries. In both cases, this means that the Gini index of measured incomes will overstate true income inequality.
When did inequality rise?
Michail Moatsos of Utrecht University and Joery Baten of Tuebingen University show that from 1820 to 1929, inequality rose slightly—then tapered off—as GDP per capita increased. From 1950 to 1970, inequality tended to fall off as GDP per capita rose above a certain threshold. From 1980 to 2000 inequality fell with higher GDP per capita then curved back up sharply.
What is the meaning of the Gini coefficient?
The meaning of the Gini coefficient can be best understood by looking at Figures 11 and 12, which show plots of the percentage of the total wealth of a population owned by a given percentage of the population, starting from the poorest person.
What does it mean when the Gini coefficient is at the end of the curve?
The Gini coefficient equals the area between the line of equality and the cumulative wealth of the agents divided by the area under the line ...
What is the measure of wealth inequality?
A common measure of wealth inequality is the Gini coefficient (or Gini index), G.
What is the Gini coefficient for wealth?
The Gini coefficient for wealth varies from about 0.55 for Japan to 0.85 for Namibia, and is about 0.80 for the United States. Denmark, which has a strong welfare program, has a Gini coefficient of 0.81. The Gini coefficient for disposable income is typically lower, between 0.3 and 0.5, and is about 0.45 in the United States and 0.30 in Denmark.
Why is it important to introduce an explicit measure of wealth inequality?
However, it is useful to introduce an explicit measure of wealth inequality so that we can reach more quantitative conclusions.
What does it mean when the wealth curve is flat?
If the beginning of the curve is flat, that means many people have very little wealth. The end of the curve on the right must reach 100% of the total wealth in the economy. A very sharp rise near the right of the curve indicates that a few people have most of the wealth.
What is Gini coefficient?
Updated March 10, 2019. The Gini coefficient is a numerical statistic used to measure income inequality in a society. It was developed by Italian statistician and sociologist Corrado Gini in the early 1900s. 01.
How to find the Gini coefficient of a Lorenz curve?
Once a Lorenz curve is constructed, calculating the Gini coefficient is pretty straightforward. The Gini coefficient is equal to A/ (A+B), where A and B are as labeled in the diagram above. (Sometimes the Gini coefficient is represented as a percentage or an index, in which case it would be equal to (A/ (A+B))x100%.)
When does maximum inequality occur?
Maximum inequality in a society occurs when one person makes all of the money. In this situation, the Lorenz curve is at zero all the way out until the right-hand edge, where it makes a right angle and goes up to the top right corner.
What is the Lorenz curve?
The Lorenz curve is a diagonal 45-degree line in societies that have perfect income equality. This is simply because, if everyone makes the same amount of money, the bottom 10 percent of people make 10 percent of the money, the bottom 27 percent of people make 27 percent of the money, and so on.
What is the Gini coefficient?
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 is Gini index?
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. 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). The Gini is based on the difference between the Lorenz curve (the observed cumulative income distribution) and the notion of a perfectly equal income distribution.
What is the Gini coefficient?
(Don't worry - this is an article about math, not communism!) The Gini Coefficient is one way to measure how evenly the income (or wealth) is distributed throughout a country. The Gini Coefficient is calculated as follows.
What does it mean when the Gini coefficient is large?
If A is a very large area (making B very small), then the Gini Coefficient is large (almost 1) and it means there is very uneven distribution of income. Countries with a high Gini Coefficient are more likely to become unstable, since there is a large mass of poor people who are jealous of the small number of rich people.
What is the highest possible Gini coefficient?
The highest possible Gini Coefficient is 1 and this implies 1 person gets all the income.
What percentage of the population earns 15%?
In summary, the bottom 30% of the population earns 15% of the income, while the top 30% earns 45% of the income.
Is the Lorenz curve a straight line?
The above story is simplified and with a large data set, the Lorenz Curve will appear to be a curve, not a series of straight lines.
Is China's coefficient high?
China's coefficient is quite high and this is causing a lot of concern. The Eastern provinces are now well-developed and responsible for most of the income growth, whereas the rural west is still quite poor.
What is Gini coefficient?
As you know, the Gini coefficient is a measure of income distribution (or wealth distribution), which ranges from 0 (or 0%) to 1 (i.e. 100%). 0 is perfect equality (every person has the same income) and 1 represents perfect inequality. If you want to compare your value with the inequality level in Europe, please have a look on Eurostat website: http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_di12
Why is the Gini coefficient important?
Gini coefficient is also used to analyse species abundance in a community. If there is a highly dominant species and data is highly unevenly distributed, then it concluded that Gini coefficient value would be high. In ecology context your value shows much even abundance of spevies
What is the Gini coefficient of a poor country?
NOTE: Poor countries (those with low per-capita GDP) have Gini coefficients that fall over the whole range from low (0.25) to high (0.71) , while rich countries have generally low Gini coefficient (under 0.40).
What is the advantage of the Gini coefficient?
The Gini coefficient's main advantage is that it is a measure of inequality by means of a ratio analysis, rather than a variable unrepresentative of most of the population , such as per capita income or gross domestic product.
What should the skewness of a normal distribution be?
It is desirable that for the normal distribution of data the values of skewness should be near to 0. What if the values are +/- 3 or above?
Who created the Gini index?
It was developed by the Italian statistician Corrado Gini and published in his 1912 paper "Variabilità e mutabilità" ("Variability and Mutability"). The Gini index is the Gini coefficient expressed as a percentage, and is equal to the Gini coefficient multiplied by 100.
Is the Gini coefficient close to the level of inequality?
Your Gini index is close to the level of inequality that prevails in Denmark, Germany, Hungary, Malta etc. As you see the Gini coefficient can be quite close for countries with very different level of mean/median income. It is influenced by the distribution of income between people. Cite. 1 Recommendation.
Overview
In economics, the Gini coefficient , also known as the Gini index or Gini ratio, is a measure of statistical dispersion intended to represent the income inequality or the wealth inequality within a nation or a social group. The Gini coefficient was developed by the statistician and sociologist Corrado Gini.
The Gini coefficient measures the inequality among values of a frequency distri…
History
The Gini coefficient was developed by the Italian statistician Corrado Gini and published in his 1912 paper Variability and Mutability (Italian: Variabilità e mutabilità). Building on the work of American economist Max Lorenz, Gini proposed that the difference between the hypothetical straight line depicting perfect equality, and the actual line depicting people's incomes, be used as a measure of inequality.
Definition
The Gini coefficient is a single number that demonstrates a degree of inequality in a distribution of income/wealth. It is used to estimate how far a country's wealth or income distribution deviates from a totally equal distribution.
The Gini coefficient is usually defined mathematically based on the Lorenz curve, which plots the proportion of the total income of the population (y axis) that is …
Calculation
While the income distribution of any particular country will not always follow theoretical models in reality, these functions give a qualitative understanding of the income distribution in a nation given the Gini coefficient.
The extreme cases are represented by the "most equal" society in which every person receives the same income (G = 0) and the "most unequal" society (com…
Generalized inequality indices
The Gini coefficient and other standard inequality indices reduce to a common form. Perfect equality—the absence of inequality—exists when and only when the inequality ratio, , equals 1 for all j units in some population (for example, there is perfect income equality when everyone's income equals the mean income , so that for everyone). Measures of inequality, then, are measures of the average deviations of the from 1; the greater the average deviation, the greater the inequali…
Of income distributions
Gini coefficients of income are calculated on a market income as well as a disposable income basis. The Gini coefficient on market income—sometimes referred to as a pre-tax Gini coefficient—is calculated on income before taxes and transfers, and it measures inequality in income without considering the effect of taxes and social spending already in place in a country. The Gini coef…
Of social development
Gini coefficient is widely used in fields as diverse as sociology, economics, health science, ecology, engineering and agriculture. For example, in social sciences and economics, in addition to income Gini coefficients, scholars have published education Gini coefficients and opportunity Gini coefficients.
Education Gini index estimates the inequality in education for a given population. It is used to di…
Features
The Gini coefficient has features that make it useful as a measure of dispersion in a population, and inequalities in particular.
What Is The Gini Index?
Understanding The Gini Index
Graphical Representation of The Gini Index
The Gini Index Around The World
Limitations of The Gini Index
What Country Has The Highest Gini Index?
What Does A Gini Index of 50 Mean?
- The Gini index ranges from 0% to 100%, with 0 representing perfect equality and 100 representing perfect inequality. A Gini of 50 marks the halfway point and can generally be perceived as a place where income is not fairly distributed—only 15 countries in the world have a Gini of 50 or more.8
Is The U.S. Gini Coefficient High Or Low?