Gini coefficient the gini coefficient requires that no one have a negative net income or wealth. A gini coefficient of 0 represents perfect income equality all households earning an equal share of income, while a coefficient of 1. The gini coefficient also known as the gini index or gini ratio is a measure of differences in income. Nortey, and anani lotsi department of statistics, school of physical and mathematical sciences, college of basic and applied sciences, university of ghana, accra, ghana.
The gini coefficient is a measure of inequality of a distribution. The gini coefficient is a measure of inequality of incomes or sometimes wealth across individuals. Gini index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. Pdf the gini index and measures of inequality researchgate. In this tutorial, well talk about what the gini coefficient measures, and how its calculated. The gini coefficient is one of the most famous and wide ly used. Sampling weight is optional, and can be included as an aweight. Jun 30, 2010 the gini coefficient is a measure of the inequality of a distribution often used for income or wealth distributions. Gini index is equals to area a divided by area a and b 4.
Income inequality among individuals is measured here by five indicators. In addition to the main outcome variable, the bygroup is typically required. As the graph below shows, over the past 21 years this indicator reached a maximum value of 35. We provide a description of the gini coefficient and some. Entropyand gini coefficient first,campare system entropy and average users entropy in a sample of tweets.
Lorenz curves and the gini coefficient gini coefficient. The gini index is a measure of the inequality of a distribution that can be derived from. It was developed by the italian statistician and sociologist corrado gini and published in his 1912. This is a function that calculates the gini coefficient of a numpy array. I downloaded data for 2006 family income from the u. Get a printfriendly, twopage overview of this topic for california.
Denmark gini index world bank estimate the value for gini index world bank estimate in denmark was 28. Gini index of household income inequality regions of 65,000. A second look at measuring inequality in south africa. A value of 0 represents absolute equality, a value of 100 absolute inequality. Of the 22 member countries of organization for economic cooperation and development, for which longterm time series are available, the gini coefficient of disposable income rose from 0. The gini coefficient g is an index for measuring inequality. The second section introduces the fundamental and commonly misunderstood concept of heritability. Y is the cumulative distribution of the income variable, for i 0,z with y 00 and y 11. A new approach to the decomposition of the gini income inequality ratio.
Pdf the gini index is a summary statistic that measures how. Measure of the deviation of the distribution of income among individuals or households within a country from a perfectly equal distribution. A gini coefficient of 0 represents perfect income equality all households earning an equal share of income, while a coefficient of 1 represents perfect income inequality one household earning all of the income and the rest earning none. The gini coefficient is a ratio between 0 and 1, where 0 implies that each individual receives the same income and 1 imply that only one individual receives all the income benson, 1970 5. Mongolia gini index world bank estimate the value for gini index world bank estimate in mongolia was 32. This is similar to calculating the gini coefficient for wage separately for each combination of team and year. The gini index is the gini coefficient from the italian corrado gini expressed as a percentage, and is equal to the gini coefficient multiplied by 100. If the area between the line of perfect equality and lorenz curve is a, and the area under the. Gini coefficient measures the extent to which the distribution of income within a country deviates from a perfectly equal distribution. A new approach to the decomposition of the gini income inequality. As the graph below shows, over the past 12 years this indicator reached a maximum value of 28. It was developed by the italian statistician corrado gini in 1912. Lorenz curve coincides with the diagonal in figure 2 and 1 perfect inequality. Estimating gini coefficient when we only have mean income by.
Gini coefficient and lorenz curve pdf download, cambridge international as and alevel chemistry course book free download ae94280627 estimation of the gini coefficient for the lognormal distribution of income using the. The values of gini coefficient values are between zero and one with the lowest coefficient zero representing equality in which all earn equal income while a coefficient of one indicates an inequality whereby only one person earns all the income among a group of workers. Import the data into r as explained in r walkthrough 5. Lorenz curves and the gini coefficient free download as powerpoint presentation.
This file contains additional information such as exif metadata which may have been added by the digital camera, scanner, or software program used to create or digitize it. Apr 25, 2017 the gini coefficient measures income the inequality of a population of a country or region. Notes on how to compute gini coefficient suppose you are given data like this. Gini coefficient simple english wikipedia, the free. The following two sections briefly overview evidence for effects of inequality gini and genes on education, health and wellbeing. 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. Gini index of household income inequality regions of. The gini coefficient and other standard inequality indices reduce to a common form. Gini coefficients are often used to quantify income inequality, read more here. As always, my key terms are in red, and examples are in green. Gini coefficient diagram, based on the version by bluemoosebenfrantzdale.
Gini coefficient gini coefficient gini coefficient the. A second look at measuring inequality in south africa 3 z z z i g. It was developed by the italian statistician corrado gini in 1912 definition. Park 2012, recounted that during the late 1960s, poverty among rural south koreans was 35. The gini coefficient is usually a number between 0 and 1 or 0 to 100. This paper employs an education gini index to measure inequality in educational attainment. The gini coefficients main advantage is that it is a measure of inequality by means of a ratio analysis, rather than a variable unrepresentative of most of the population, such as per capita income or gross domestic product. A lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual. 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. Income inequality is measured using the gini coefficient, which calculates the extent to which the income distribution in a country deviates from perfect equity. A low gini coefficient means a more equal distribution while a high gini coefficient means a more unequal distribution.
This correspondence between areas on the graph of the lorenz curve the concentration of income is the idea behind the gini coefficient. The lorentz curve is a graphical representation of this inequality which is intimately related to the gini coefficient. Let us label the areas in the graph of a lorenz curve, in this case for an exponential distribution. The gini coefficient is a measure of the inequality of a distribution often used for income or wealth distributions. A score of 1 would represent complete inequality, i. Save it in an easily accessible location, such as a folder on your desktop. Doing this for 10 bins is the equivalent of calculating a gini coefficient directly from decile data such as in the laknermilanovic dataset. The gini coefficient is a ratio between 0 and 1, where 0 implies that each. Mar 20, 2020 gini index measures the extent to which the distribution of income or consumption expenditure among individuals or households within an economy deviates from a perfectly equal distribution. The role and robustness of the gini coefficient as an.
Gini index world bank estimate world bank, development research group. Aug 19, 2017 then i divided the data up into between 2 and 100 bins, took the means of the bins, and calculated the gini coefficient of the bins. You can think of the horizontal axis as percent of people and the vertical axis as the percent of income those people receive. The gini coefficient was proposed by gini as a measure of inequality of income or wealth. A data science based standardized gini index as a lorenz. Jul 06, 2010 gini index is equals to area a divided by area a and b 4. Therefore the lorenz curves always start and end at the same places, where 0% of people make 0% of the countrys income and 100% of people make 100% of the total.
If the file has been modified from its original state, some details such as the timestamp may not fully reflect those of the original file. In the madeup example below inspired by carlos post i use the userwritten ineqdeco command to calculate gini coefficients for price in the auto dataset, separate for each combination of foreigndomestic and reputation1 to 5. The entry highlights methodological aspects to explain the various formulas that can be used to calculate the g value and to show the links with the lorenz curve and the mean. It is a measure of the inequality of a distribution, a value of 0. Topic pdf include your graphic or table in the pdf.
The gini coefficient is a wellunderstood measure of inequality. Xis the cumulative distribution of the population variable, for i 0,z with x 00 and x 11. It presents both the direct and indirect methods of. The gini coefficient is a commonlyused measure of income inequality that condenses the entire income distribution for a country into a single number between 0 and 1. Data are based on primary household survey data obtained from government statistical agencies and world bank country departments. I calculate system entropy and average users entropy base on memesi considered every unique hashtag as a meme. Estimation of the gini coefficient for the lognormal. Youll understand how the lorenz curve relates to the gini coefficients. Gini coefficient and the lorentz curve file exchange.
Pdf the gini coefficient as a measure of disproportionality. Gini coefficients are often used to quantify income inequality, read more here the function in gini. Gini coefficients of education world bank elibrary. Based on the distribution of an outcome variable among rankedordered units in a population, the gini coefficient measures the degree of inequality in the distribution of total resources. The gini coefficient is a measure of statistical dispersion most prominently used as a measure of inequality of income distribution or inequality of wealth distribution. We previously identified a number of genes in the human protein atlas hpa cell line data.
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. A low gini coefficient means a more equal distribution while a high gini coefficient means a. However, when the estimation principles used to obtain g. The gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, and it ranges between 0 in the case of perfect equality and 1 in the case of perfect inequality. The gini coefficient as a robust measure of gene expression stability in multiple cellline data sets. Also from table 1, the estimates of the gini index for lognormal distribution was found to be between 0. A score of 0 on the gini coefficient represents complete equality, i. This paper stems from work done by the authors at the mathematics for social justice workshop held in june of 2007 at middlebury college. Worldwide, gini coefficients range from approximately 0.
Aug 01, 2016 of the 22 member countries of organization for economic cooperation and development, for which longterm time series are available, the gini coefficient of disposable income rose from 0. The first section introduces the commonly used measure of inequality the gini coefficient gini. 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. It discusses how the italian statistician corrado gini developed it. Data are displayed for geographies with at least 65,000 people based on 2017 population estimates. A gini coefficient of 0 expresses perfect equality, with all units receiving an equal share. For oecd countries, in the late 20th century, considering the effect of taxes and transfer payments, the income gini coefficient ranged between 0. The gini index is the gini coefficient expressed as a percentage. This file is licensed under the creative commons attributionshare alike 4.