A comparative study of the gini coefficient estimators based on the. It is defined as the area between the lorenz curve and the diagonal, divided by the total area under the diagonal. A lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with. Gini coefficient and four other inequality measures are defined on 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. A measure of income inequality within a population, ranging from zero for complete equality, to one if one person has all the income.
Gini coefficients of education world bank documents. Lorenz curve and gini coefficient the lorenz curve and gini coefficient are both methods of assessing the level of income equality or inequality within an economy. Denmark gini index world bank estimate the value for gini index world bank estimate in denmark was 28. Gini coefficient income distribution inequality 20002017 colombia. As the graph below shows, over the past 12 years this indicator reached a maximum value of 28. In economics, the gini coefficient sometimes called the gini index or gini ratio, is a measure of. For more information and methodology, please see povcalnet. Notes on how to compute gini coefficient suppose you are given data like this. A popular representation of income inequality, the gini coefficient is based. A higher number indicates a greater degree of income inequality. Data and research on social and welfare issues including families and children, gender equality, gini coefficient, wellbeing, poverty reduction, human capital and inequality. Gini coefficient as per wikipedia would be ratio of area between red and blue line to the total area under blue line in the following graph.
The gini coefficient is a measure of inequality of incomes or sometimes wealth across individuals a score of 0 on the gini coefficient represents complete equality, i. The lowest 10% of earners make 2% of all wages the next 40% of earners make 18% of all wages the next 40% of earners make 30% of all wages the highest 10% of earners make 50% of all wages. If the number of negatives is a lot larger, this could be a potential issue. Gini developed his coefficient in 1912, building on the work of american economist max lorenz, who published a hypothetical way to depict total equality a straight diagonal line on a graph. A gini coefficient of zero indicates perfect equality everyone earns the same income and a coefficient of one indicates perfect inequality one person holds all the income and. Gini coefficient definition, formula how to calculate. Measure of the deviation of the distribution of income among individuals or households within a country from a perfectly equal distribution. 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. Income inequality refers to the distribution of income from all sources across all individuals or families or households. Martens p, brownell m, au w, macwiliam l, prior h, schultz j, guenette w, elliott. The gini coefficient is usually a number between 0 and 1 or 0 to 100. The following two sections briefly overview evidence for effects of inequality gini and genes on education, health and wellbeing.
Gini coefficient income distribution inequality 20002017. Romania gini index world bank estimate the value for gini index world bank estimate in romania was 35. Gini coefficient is a statistical measure of distribution that is used as a gauge of economic inequality. A value of 0 represents absolute equality, a value of 100 absolute inequality. I will discuss the gini coefficient and relate it to the relative mean difference. In my function, fex 19968, ginicoeff requires two variables. Examples utilizing these various methods are given later in this paper. We consider the technological heterogeneity dividing the sample into similar groups, and estimating environmental efficiency indicators into metafrontier and group frontiers. It was developed by the italian statistician corrado gini in 1912 definition. Gini indices of selected countries are from publicly available data from the world bank, nationmaster, and the us census bureau. Therefore, a key advantage of this method is that it does not. Income inequality is measured using the gini coefficient, which calculates the extent to which the income distribution in a country deviates from perfect equity. Gini coefficient wikimili, the best wikipedia reader. Gini coefficient measures the extent to which the distribution of income within a country deviates from a perfectly equal distribution.
This statistic shows the gini coefficient, an index for measuring income distribution, for u. Gini coefficient income distribution inequality 20002017 ecuador. The gini index or gini coefficient is a statistical measure of distribution developed by the italian statistician corrado gini in 1912. Gini index world bank estimate world bank, development research group. Standard application of the gini coefficient is to show income distribution across groups through time 45. Ginis mean difference gmd was first introduced by corrado gini in 1912 as an alternative measure of variability. Note on income inequality data there has been much progress in improving the availability, quality and comparability of income and wealth inequality data. The first section introduces the commonly used measure of inequality the gini coefficient gini.
In this case, the gini coefficient is 0 and it means there is perfect distribution of. 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. Incomes may be measured over a week or a month or a year or even longer, and before or after receipt of benefits and payment of taxes and housing costs. Note that because the underlying household surveys differ in method and in the type of data collected, the distribution data are not strictly comparable across countries. The second section introduces the fundamental and commonly misunderstood concept of heritability. Like the relative mean difference, there does not exist a sample statistic that is in general an. 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 or wealth distribution of a nations residents, and is the most commonly used measurement of inequality. View more submit twas brillig and the slithy toves. The gini coefficient is a measure of statistical dispersion most prominently used as a measure of inequality of income distribution or.
Income distribution function, pdfx, gini coefficient. 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. Information from its description page there is shown below. Income distribution an overview sciencedirect topics. A map showing gini coefficients by country for 2017. A gini coefficient of 0 expresses perfect equality, where all. Adjusted gini coefficient calculation for premature mortality using urban income quintile fiscal years. It was developed by the italian statistician and sociologist corrado gini and published in his 1912 paper variability and mutability. Incomes are more equally distributed and fewer people are poor where social spending is high. The gini coefficient measures the inequality among values of a frequency distribution. Estimation of the gini coefficient for the lognormal. The gini coefficient is defined as a ratio of the areas on the lorenz curve diagram.
Pdf the gini index is a summary statistic that measures how equitably a resource is distributed in a population. Gmd and the parameters which are derived from it such as the gini coefficient or the concentration ratio have been in use in the area of income distribution for almost a century. It is defined as a it is defined as a ratio with values between 0 and 1. We will first look at how the gini coefficient is calculated and compare it with other measures of inequality between the rich and poor, such as the 9010 ratio. Pdf the gini index and measures of inequality researchgate. 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. Using the definition of gini index in equation 1, as twice the area between the. The gini coefficient on wealth is the most important number in deciding tax policy and it should be a goal for any government. Recently, the gini coefficient has been extended to measure disproportionality in energy resources 46, inequality in plant size or fecundity, as well as spatial distributions of different land types 39. In this regard, the sample gini index can be expressed as. The gini coefficient is a measure of inequality of a distribution.
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. In the example above, the red lorenz curve divides the area below the line of equal distribution into two halves of the same size, and the. The gini coefficient also known as the gini index or gini ratio is a measure of differences in income. This revision presentation takes you through plotting and calculating both the lorenz curve and gini coefficient and sets them in some historical context. First of all, let us recall the definition of the coordinates of the lorenz curve.
The empirical counterpart of these theories consists of studies, which compare income distribution data across various societies, or at different points of time. The gini index is the gini coefficient expressed as a percentage, and is equal to the gini coefficient multiplied by 100. Definition of gini coefficient new word suggestion. Gini coefficient definition, calculation and indias. A gini coefficient of one 100 on the percentile scale expresses maximal inequality among values for example where only one person has all the income. For example, taking y to mean the income or wealth of a person or household. To assess inequality economists often use a measure called thegini coefficient, which is based on the differences in incomes, wealth, or some other measure between people. Also from table 1, the estimates of the gini index for lognormal distribution was found to be between 0. A score of 1 would represent complete inequality, i. The gini coefficient can also be expressed in terms of the area under the roc curve auc. If a 0, it means the lorenz curve is actually the line of equality. A numerical example of how to calculate the gini index 12.
Gini coefficient simple english wikipedia, the free. The aim of this study was to analyze the co 2 emission gini index and the environmental efficiency for 60 leading world economies, in 2010. Oecd glossary of statistical terms gini index definition. Hi b, thank you for your question about a point that is often misunderstood. Commons is a freely licensed media file repository. After constructing the education lorenz curve, the calculation of education gini is straightforward based on equation 2.
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