The Gini coefficient is a statistical measure of economic inequality within a population. It is a value between 0 and 1, with 0 indicating perfect equality (where everyone has the same income) and 1 indicating perfect inequality (where one person has all the income).
The Gini coefficient is calculated by measuring the distribution of a country's income among its residents. This is typically done by creating a Lorenz curve, which plots the cumulative percentage of a country's income earned by different percentages of the population, ranked from lowest to highest. The Gini coefficient is calculated as the ratio of the area between the Lorenz curve and the 45-degree line of perfect equality to the total area under the 45-degree line.
A country with a high Gini coefficient has a greater level of income inequality than a country with a low Gini coefficient. For example, countries like South Africa and Brazil have very high Gini coefficients, indicating that there is a large gap between the wealthy and the poor. On the other hand, countries like Sweden and Denmark have very low Gini coefficients, indicating that there is relatively less income inequality.
The Gini coefficient is widely used in economics, sociology, and other fields to measure income inequality and is considered as a key indicator of economic inequality. In practice, however, the Gini coefficient is not always easy to interpret, and the way income is distributed can be affected by many factors, including the tax system and social welfare policies.
You may also like:
- Ability-to-Pay: Horizontal equity
- Ability-to-Pay: Horizontal equity
- Sources of public revenue in India
Post a Comment
We welcome relevant and respectful comments. Off-topic or spam comments may be removed.