Gini coefficient

The Gini coefficient is a measure of inequality developed by the Italian statistician Corrado Gini and published in his 1912 paper "Variabilità e mutabilità". It is usually used to measure income inequality, but can be used to measure any form of uneven distribution. The Gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality (where everyone has the same income) and 1 corresponds with perfect inequality (where one person has all the income, and everyone else has zero income). The Gini index is the Gini coefficient expressed in percentage form, and is equal to the Gini coefficient multiplied by 100.

Gini coefficients in the world

See complete listing in list of countries by income equality.

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While most developed European nations tend to have Gini coefficients between 0.24 and 0.36, the United States has been above 0.4 for the last two decades, indicating that the United States has greater inequality. Using the Gini can help quantify differences in welfare and compensation policies and philosophies. However it should be borne in mind that the Gini coefficient can be misleading when used to make political comparisons between large and small countries (see criticisms section).

Related Topics:
Welfare - Compensation - Criticisms

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For example, Hungary and Denmark, the two E.U. member countries listed above with the lowest coefficients, are calculated separately by the United Nations, while New Jersey and Mississippi are calculated together as part of the United States, despite the fact that the Mid-Atlantic states and the Deep South of the U.S. are vastly different economic regions with wide differences in cost of living and average income.

Related Topics:
Hungary - Denmark - United States - Mid-Atlantic states - Deep South

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Considered together, Hungary and Denmark have a higher Gini score than the U.S. as does the entire European Union if all member states are lumped together. Conversely, when each state or geographical region in the U.S. is considered separately, the Gini scores will generally be lower than those calculated for the entire country.

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Development of Gini coefficients in the US over time

Gini coefficients for the United States at various times, according to the US Census Bureau:

Related Topics:
United States - US Census Bureau

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• 1970: 0.394
• 1980: 0.403
• 1990: 0.428
• 2000: 0.462