KQ1: Measuring Income Inequality: The Gini Coefficient/Index

The Gini coefficient measures the inequality among values of a frequency distribution, for example levels of income. A Gini coefficient of zero expresses perfect equality, i.e. where everyone has the same income. A Gini coefficient of one (or 100%) expresses maximal inequality among people, i.e. where only one person has all the income.

Current Gini coefficient of countries based on CIA estimates.

Income disparity since WWII, where 0 equals perfect equality and 100 equals perfect inequality. Notice the rise in income inequality in the US.

Taiwan ranks amongst some of the most equal countries of the world and with hardly any income redistribution through taxation.

The US ranks amongst some of the world’s most unequal countries of the world.

Note the rise in income inequality globally since 1950.

There is a significant correlation between health and social problems and income inequality due to the resentment, mistrust and apathy engendered by massive economic equalities.

Notice that income inequality tends to be higher in minority dominated counties, as well as the big cities of the US.

The Lorenz curve is the actual distribution of incomes within a given place.