Data are based on primary household survey data obtained from government statistical agencies and world bank country departments. A perfectly equal income distribution will have a gini coefficient of 0, while a perfectly unequal distribution will have a gini coefficient of 1. To accommodate the special feature of this educational attainment data, a new formula has to be worked out from the. 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. Fifty years ago, corrado gini, inventor of the gini coefficient, which measures income inequality, died. The gini coefficient is a measure of inequality of a distribution. The gini index or gini coefficient is a statistical measure of distribution developed by the italian statistician corrado gini in 1912. Gini coefficient simple english wikipedia, the free. The gini coefficient the gini coefficient is a statistic which measures the ability of a scorecard or a characteristic to rank order risk.
The gini coefficient is defined as a ratio of the areas on the lorenz curve diagram. Gini coefficients of education world bank documents. From table 1, all the p values of the kolmogorovsmirnov tests of the various regions, rural and urban areas, male and female family heads are greater than 0. For more information and methodology, please see povcalnet. It is a relative comparison of the gap in household incomes across a given region, country, or the world. Remuneration remuneration is any type of compensation or payment that an individual or employee receives as payment for their services or the work that they do for an organization or. It was developed by the italian statistician corrado gini in 1912 definition. Therefore the lorenz curves always start and end at the same places, where 0% of people make 0% of the countrys income and 100% of people make 100% of the total income. A value of 0 represents absolute equality, a value of 100 absolute inequality.
If a 0, the gini coefficient becomes 0, which means perfect equality, whereas if b 0, the gini coefficient becomes 1, which means complete inequality. The gini coefficient, gini index, or coefficient of concentration is a concept that comes up for example in economics, when looking at the distribution of incomes. At an initial income of usd below which countries are classified according to the world bank as low income countries the predicted effect of a 1 percentage point increase in the gini coefficient on the longrun level of gdp per capita is around 4 percent. It was developed by the italian statistician and sociologist corrado gini and published in his 1912 paper. Often it is used by the government to report the economic condition of a country. The gini coefficient also known as the gini index or gini ratio is a measure of differences in income. Measure of the deviation of the distribution of income among individuals or households within a country from a perfectly equal distribution. Also from table 1, the estimates of the gini index for lognormal distribution was found to be between 0. It affects and is affected by many other forms of inequality, such as inequalities of wealth, political power, and social status. Gini index of household income inequality regions of. From the classical gini index of income inequality to a new zenga. I will discuss the gini coefficient and relate it to the relative mean difference.
A supernatural creature who does ones bidding when summoned. In economics, the gini coefficient sometimes called the gini index or gini ratio, is a measure of. A comparative study of the gini coefficient estimators based on the. Gini index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. While gross domestic product is the usual aggregate. Pdf the gini index and measures of inequality researchgate. The gini coefficient is a measure of statistical dispersion most prominently used as a measure of inequality of income distribution or. Gini coefficient from discrete data of complete and abridged life tables. Income inequality is a major dimension of social stratification and social class. They present two methods direct and indirect for calculating an education gini index, and generate a quinquennial data set on education gini indexes for the over15population in 85 countries 196090. The following article will guide you about the two main methods adopted to measure inequality of income. Gini coefficient definition, principles and limitations. Difference between the estimated distribution of household income and a perfectly equal distribution, measured between 0 and 1 e.
Income distribution function, pdfx, gini coefficient. Income inequality, in economics, significant disparity in the distribution of income between individuals, groups, populations, social classes, or countries. True means that the computation of the gini coefficient for that series has been skipped due to negative values or insufficient elements less than 2. The following two sections briefly overview evidence for effects of inequality gini and genes on education, health and wellbeing. In order to study income inequality, one needs income at an individual level.
The difference between the gini coefficients for market. According to the map showing gini coefficients for all countries, greenland has a gini coefficient that is world bank estimate world bank, development research group. Definition of gini coefficient new word suggestion. Gini indices of selected countries are from publicly available data from the world bank, nationmaster, and the us census bureau. The gini coefficient is one of the most famous and widely used. The second section introduces the fundamental and commonly misunderstood concept of heritability.
Oecd glossary of statistical terms gini index definition. The gini coefficient ranges between 0 and 1 or it can also be expressed as a number from 0 to 100 and is given by the ratio of the areas. The most traditional member of the income inequality family is the gini. The gini index is one of the most commonly used indicators of income inequality, and its computation and interpretation require a thorough understanding of various quantitative literacy concepts. The gini index is the gini coefficient expressed as a percentage, and is equal to the gini coefficient multiplied by 100. In this case, the gini coefficient is 0 and it means there is perfect distribution of income everyone earns the same amount. Although gini coeffi cients are generally used to measure income inequality, some refer to market incomes i.
In all countries, the gini coefficient for disposable income exhibits less inequality than the gini coefficient for market income, as taxes and transfers redistribute income to lowerincome households. Pdf the gini coefficient as a measure of disproportionality. Information and translations of gini coefficient in the most comprehensive dictionary definitions resource on the web. In the command window, first type ssc install use to install it. Serviceindustry jobs at the low end pay less now than in 1979, and highskilled jobs on the high end pay much moreceo compensation, in particular, has climbed into the.
The geometrical derivation of the gini index and an alternative formula. The fourth section presents new formulae for decomposing differences between two gini coefficients, by age and cause of death, and a method for decomposing these differences by age, mortality. The first section introduces the commonly used measure of inequality the gini coefficient gini. Understanding the gini coefficient income inequality is a measurement of the distribution of wealth across households. Using the definition of gini index in equation 1, as twice the area between the. Estimation of the gini coefficient for the lognormal. Income inequality is measured using the gini coefficient, which calculates the extent to which the income. Goods bads bad rate phone 80% 80% 15% no phone 20% 20% 15% a gini value of 100% means that a characteristic. Pdf the gini index is a summary statistic that measures how equitably a resource is distributed in a population. In particular, the gini index has been widely used by economists and. The gini coefficient measures income concentration at each percentile of the population and ranges from 0 perfectly equal to 1 perfectly unequal. You can think of the horizontal axis as percent of people and the vertical axis as the percent of income those people receive. The gini coefficient is usually a number between 0 and 1 or 0 to 100. Stata introduced a new file format which older versions of stata cant open.
Income mobility refers to the ease with which workers can move up and. Gini coefficient diagram, based on the version by bluemoosebenfrantzdale. First of all, let us recall the definition of the coordinates of the lorenz curve. Income mobility another factor to consider when studying the degree of inequality in a society is the amount of income mobility. Lorenz curve coincides with the diagonal in figure 2 and 1 perfect inequality. A then you have to determine what fraction of the triangle is made up of area a. If a 0, it means the lorenz curve is actually the line of equality. The lorenz curve is obtained by plotting the cumulative percentage of the nations income against the cumulative percentage of the.
An alternative approach is to define the gini coefficient as half of the relative mean. In economics, the gini coefficient, sometimes called the gini index or gini ratio, is a measure of statistical dispersion intended to represent the income or wealth distribution of a nations residents, and is the most commonly used measurement of inequality. Gini coefficient wikipedia statistics, economics a measure of the inequality of a statistical distribution, ranging from 0 total equality to 1 maximal inequality, used in various disciplines but especially in economics to compare incomes or wealth. Abstract the authors use a gini index to measure inequality in educational attainment. Gini synonyms, gini pronunciation, gini translation, english dictionary definition of gini. The gini coefficient gini index or gini ratio is a statistical measure of economic inequality in a population. A gini value of 0% means that the characteristic cannot distinguish good from bad cases, eg. The power of the gini index the formula pacific standard. In the united states between 1979 and 2007, the gini coefficient for pretax income, according to a study by the congressional budget office pdf, rose from 48 to 59.
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