Gini index

In economics, the Gini coefficient (/ ˈ dʒ iː n i / JEE-nee), sometimes called Gini index, or Gini ratio, is a measure of statistical dispersion intended to represent the income or wealth distribution of a nation's residents, and is the most commonly used measurement of inequality.

The results compare favorably with the estimates from the jackknife with agreement improving with increasing sample size. Given the limitations of Gini coefficient, other statistical methods are used in combination or as an alternative measure of population dispersity. A society that scores 0. Very simple to implement. Gini coefficient on after-taxes and transfers basis for total population ranged between 0.

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GINI index (World Bank estimate) World Bank, Development Research Group. Data are based on primary household survey data obtained from government statistical .

You're not signed up. Standard economic measure of income inequality , based on Lorenz Curve. A society that scores 0. Higher the number over 0 higher the inequality, and the score of 1. It is used also as a measure of other distributional inequalities such as market share. Named after its inventor , the Italian statistician Corrado Gini Also called Gini coefficient or index of concentration. Use 'Gini index' in a Sentence I wondered how we ranked on the gini index , because I knew that it was very important and would determine a lot of future choices.

You should try to break down the gini index to find out where the people with the most money live in your city. Based on its high Gini Index score, economists have determined that the United Arab Emirates has a largely unequal distribution of income among its citizens. You Also Might Like Top 5 States for Entrepreneurship. The combined income is now split into more households. Many old people are living separately from their children in Hong Kong.

These social changes have caused substantial changes in household income distribution. Income Gini coefficient, claims Kwok, does not discern these structural changes in its society. According to the US Census Bureau, between and , the population of United States experienced structural changes in overall households, the income for all income brackets increased in inflation-adjusted terms, household income distributions shifted into higher income brackets over time, while the income Gini coefficient increased.

Another limitation of Gini coefficient is that it is not a proper measure of egalitarianism , as it is only measures income dispersion. For example, if two equally egalitarian countries pursue different immigration policies, the country accepting a higher proportion of low-income or impoverished migrants will report a higher Gini coefficient and therefore may appear to exhibit more income inequality. Some countries distribute benefits that are difficult to value.

Countries that provide subsidized housing, medical care, education or other such services are difficult to value objectively, as it depends on quality and extent of the benefit. In absence of free markets, valuing these income transfers as household income is subjective.

The theoretical model of Gini coefficient is limited to accepting correct or incorrect subjective assumptions. In subsistence-driven and informal economies, people may have significant income in other forms than money, for example through subsistence farming or bartering. These income tend to accrue to the segment of population that is below-poverty line or very poor, in emerging and transitional economy countries such as those in sub-Saharan Africa, Latin America, Asia and Eastern Europe.

Informal economy accounts for over half of global employment and as much as 90 per cent of employment in some of the poorer sub-Saharan countries with high official Gini inequality coefficients. In developing countries, the informal economy predominates for all income brackets except for the richer, urban upper income bracket populations. Gini has some mathematical limitations as well. It is not additive and different sets of people cannot be averaged to obtain the Gini coefficient of all the people in the sets.

Given the limitations of Gini coefficient, other statistical methods are used in combination or as an alternative measure of population dispersity. For example, entropy measures are frequently used e. These measures attempt to compare the distribution of resources by intelligent agents in the market with a maximum entropy random distribution , which would occur if these agents acted like non-intelligent particles in a closed system following the laws of statistical physics.

The Gini index is also related to Pietra index—both of which are a measure of statistical heterogeneity and are derived from Lorenz curve and the diagonal line. These indicators are related to Gini. The inverse Simpson index increases with diversity, unlike Simpson index and Gini coefficient which decrease with diversity. The Simpson index is in the range [0, 1], where 0 means maximum and 1 means minimum diversity or heterogeneity.

Although the Gini coefficient is most popular in economics, it can in theory be applied in any field of science that studies a distribution. For example, in ecology the Gini coefficient has been used as a measure of biodiversity , where the cumulative proportion of species is plotted against cumulative proportion of individuals. The Gini coefficient is sometimes used for the measurement of the discriminatory power of rating systems in credit risk management. A study accessed US census data to measure home computer ownership, and used the Gini coefficient to measure inequalities amongst whites and African Americans.

Results indicated that although decreasing overall, home computer ownership inequality is substantially smaller among white households. A peer-reviewed study titled Employing the Gini coefficient to measure participation inequality in treatment-focused Digital Health Social Networks [81] illustrated that the Gini coefficient was helpful and accurate in measuring shifts in inequality, however as a standalone metric it failed to incorporate overall network size.

The discriminatory power refers to a credit risk model's ability to differentiate between defaulting and non-defaulting clients. It is related to accuracy ratio in population assessment models. From Wikipedia, the free encyclopedia.

Not to be confused with Gini impurity. List of countries by income equality. English translation in Rivista di Politica Economica , 87 , — Gini coefficient becomes 1, only in a large population where one person has all the income.

In the special case of just two people, where one has no income and the other has all the income, the Gini coefficient is 0. For 5 people set, where 4 have no income and the fifth has all the income, the Gini coefficient is 0. Income distribution — Inequality — Country tables". Archived from the original on 9 November Archived from the original PDF on 24 May United Nations Development Program.

Archived from the original on 12 July Retrieved 24 November Archived from the original PDF on 20 October Theoretical Discussion and Empirical Findings". Review of Income and Wealth.

Theory and applications Vol. Food and Agriculture Organization, United Nations. American Journal of Sociology. See also ——— What it is and how it is measured". Archived from the original on 1 December A decomposition across countries". International Social Security Review. Retrieved 13 December Gini coefficients of education" PDF. Policy Research Working Papers. Archived from the original PDF on 5 June Economic development as opportunity equalization Report. Journal of Economic Inequality.

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Reprinted in Pizetti, E. Memorie di metodologica statistica. Libreria Eredi Virgilio Veschi. Giorgi, Giovanni Maria Journal of Applied Econometrics.

Modarres, Reza; Gastwirth, Joseph L. Xu, Kuan January Department of Economics, Dalhousie University. Retrieved 1 June The Chinese version of this paper appears in Xu, Kuan Journal of Business and Economic Statistics. Alter-globalization Anti-globalization Counter-hegemonic globalization Cultural globalization Deglobalization Democratic globalization Economic globalization Environmental globalization Financial globalization Global citizenship education Global governance Global health History of archaic early modern Military globalization Political globalization Trade globalization Workforce globalization.

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