1. What is the Gini Coefficient?

The Gini coefficient is a measure of statistical dispersion intended to represent income inequality or wealth inequality within a nation or any other group of people. It ranges from 0 (perfect equality) to 1 (perfect inequality).

2. How Does the Calculator Work?

The calculator uses the Gini coefficient formula:

Where:

• \( income_i \) — Income of individual i (sorted in ascending order)
• \( i \) — Rank of individual in the income distribution (1 for lowest income)
• \( n \) — Total number of individuals
• \( G \) — Gini coefficient (dimensionless)

Explanation: The formula compares the cumulative proportions of the population against cumulative proportions of income they receive.

3. Interpretation of Gini Coefficient

Details:

• 0 = Perfect equality (everyone has exactly the same income)
• 0.2-0.3 = Relatively equal distribution
• 0.4-0.5 = High inequality
• 1 = Perfect inequality (one person has all the income)

4. Using the Calculator

Tips: Enter income values separated by commas. The calculator will sort them automatically. All values must be non-negative.

5. Frequently Asked Questions (FAQ)

Q1: What is considered a "good" Gini coefficient?
A: Generally, coefficients below 0.3 represent relatively equal distribution, while above 0.4 indicate high inequality.

Q2: How does this compare to the Lorenz curve method?
A: This formula provides the same result as calculating the area between the Lorenz curve and the line of equality.

Q3: What are limitations of the Gini coefficient?
A: It doesn't show where inequality occurs and is sensitive to middle income ranges. Different distributions can have the same Gini.

Q4: Can it be used for wealth inequality?
A: Yes, the same formula applies when using wealth values instead of income values.

Q5: How often should Gini be calculated?
A: For tracking trends, annual calculation is common, but frequency depends on data availability and purpose.