The Gini Coefficient

The Gini Coefficient (also called Gini Index or Gini Ratio) is a statistical measure used to represent income inequality or wealth inequality within a nation or a group of people.

Key Points about Gini Coefficient:

Definition:

It measures how equally or unequally income (or wealth) is distributed among a population. Scale: 0 → perfect equality (everyone has the same income/wealth). 1 (or 100%) → perfect inequality (one person has all the income/wealth, and everyone else has nothing).

Interpretation:

Low Gini (0–0.3) → relatively equal society (e.g., Scandinavian countries). Moderate Gini (0.3–0.5) → moderate inequality (many developing nations). High Gini (0.5 and above) → high inequality (common in some Latin American and African countries).

Uses:

Widely used in economics, sociology, and policy-making to assess inequality. Helps compare inequality across countries or over time within the same country. Policymakers use it to guide redistributive policies like taxation, subsidies, or social welfare.

Source: https://www.thehindu.com/opinion/op-ed/why-the-gini-index-is-wrong-about-india/article69869263.ece