What is the Gini coefficient PDF?
The Gini index is a summary statistic that measures how equitably a resource is distributed in a population; income is a primary example. The Gini index is twice the area between the Lorenz curve and the curve of perfect equitability. For U.S. family income in 2006, the data leads to an estimate of G ≈ .
How do you find the Gini coefficient?
The Gini coefficient can be calculated using the formula: Gini Coefficient = A / (A + B), where A is the area above the Lorenz Curve and B is the area below the Lorenz Curve.
How do you calculate the Gini index from the Lorenz curve?
The Gini index is calculated as the ratio of the area between the perfect equality line and the Lorenz curve (A) divided by the total area under the perfect equality line (A + B).
What does a Gini coefficient of 1 mean?
inequality
The Gini coefficient is a measure of inequality of a distribution. Here, 0 corresponds to perfect income equality (i.e. everyone has the same income) and 1 corresponds to perfect income inequality (i.e. one person has all the income, while everyone else has zero income).
What factors does the Gini coefficient include?
What Is the Gini Index?
- The Gini index, or Gini coefficient, is a measure of the distribution of income across a population.
- The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect equality and 1 representing perfect inequality.
What is Gini coefficient in geography?
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.
What does a Gini index of 40 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. Therefore, the warning level of Gini index is 0.4. The Gini coefficient is often used to measure income inequality.
What is Gini coefficient used for?
“The Gini coefficient provides an index to measure inequality,” says Antonio Cabrales, a professor of economics at University College London. It is a way of comparing how distribution of income in a society compares with a similar society in which everyone earned exactly the same amount.
Why is the Gini coefficient useful?
The Gini coefficient measures how far the actual Lorenz curve for a society’s income or wealth is from the line of equality. Cowell says that the Gini coefficient is useful, particularly because it allows negative values for income and wealth, unlike some other measures of inequality.
Is Gini coefficient positive?
In reality, both extreme values are not quite reached. If negative values are possible (such as the negative wealth of people with debts), then the Gini coefficient could theoretically be more than 1. Usually the mean (or total) is assumed to be positive, which rules out a Gini coefficient less than zero.
How effective is the Gini coefficient?
Cowell says that the Gini coefficient is useful, particularly because it allows negative values for income and wealth, unlike some other measures of inequality. (If some amount of the population has negative wealth (owes money), the Lorenz curve will dip below the x-axis.) But the Gini coefficient also has limitations.
What is the Gini coefficient?
The Gini coefficient is a measure of inequality of a distribution. It is defined as a ratio with values between 0 and 1: the numerator is the area between the Lorenz curve of the distribution and the uniform distribution line; the denominator is the area under the uniform distribution line. It was developed by the Italian statistician Corrado Gini
When was the Gini index developed?
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.
How do you find the Gini coefficient from a Lorenz curve?
The Gini coefficient is defined as a ratio of the areas on the Lorenz curve diagram. If the area between the line of perfect equality and Lorenz curve is A, and the area under the Lorenz curve is B, then the Gini coefficient is A/(A+B). Since A+B = 0.5, the Gini coefficient, G = 2A = 1-2B.