Gini coefficient

The Gini coefficient ( JEE-nee), also known as the Gini index or Gini ratio, is an economic measure of statistical dispersion that describes the income inequality, the wealth inequality, or the consumption inequality within a nation or a social group. It was developed by Italian statistician and sociologist Corrado Gini. The Gini coefficient measures the inequality among the values of a frequency distribution, such as income (and consequently consumption rates). A Gini coefficient of 0 reflects perfect equality, where all income or wealth values are the same. In contrast, a Gini coefficient of 1 (or 100%) reflects maximal inequality among values, where a single individual has all of the income while all others have none. Corrado Gini proposed the Gini coefficient as a measure of inequality of income or wealth. For OECD countries in the late 20th century, considering the effect of taxes and transfer payments, the income Gini coefficient ranged between 0.24 and 0.49, with Slovakia being the lowest and Mexico the highest. African countries had the highest pre-tax Gini coefficients in 2008–2009, with South Africa having the world's highest, estimated to be 0.63 to 0.7. However, this figure drops to 0.52 after social assistance is taken into account and drops again to 0.47 after taxation. Slovakia has the lowest Gini coefficient, with a Gini coefficient of 0.238. Various sources have estimated the Gini coefficient of the global income in 2005 to be between 0.61 and 0.68. There are multiple issues in interpreting a Gini coefficient, as the same value may result from many different distribution curves. The demographic structure should be taken into account to mitigate this. Countries with an aging population or those with an increased birth rate experience an increasing pre-tax Gini coefficient even if real income distribution for working adults remains constant. Over a dozen...