The gini index measures the area between the lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Gini coefficient simple english wikipedia, the free. In economics, the gini coefficient, sometimes called the gini index or gini ratio, is a measure of statistical dispersion intended to represent the income or wealth distribution of a nations residents, and is the most commonly used measurement of inequality. Estimation of the gini coefficient for the lognormal. Gini coefficient also the gini index, developed by corrado gini. Pdf on jan 1, 2015, piotr dniestrzanski and others published the gini coefficient as a measure of disproportionality find, read and cite all the research you.
It is used as a gauge of economic inequality, measuring income distribution among a population. The gini coefficient is a measure of the inequality of a distribution often used for income or wealth distributions. The small sample variance properties of the gini coefficient are not known, and large sample approximations to the variance of the coefficient are poor mills and zandvakili. This in turn requires the pdf for x, the random variable recording the income of a single household. Corrado gini 18841965, italian statistician, demographer, sociologist and developer of the gini coefficient. Also from table 1, the estimates of the gini index for lognormal distribution was found to be between 0. In the next section, we discuss the concept of the gini index which is the popular income inequality measure. Data are based on primary household survey data obtained from government statistical agencies and world bank country departments. It is traditionally applied to the measurement of income inequality. The map shows the gini index in % of income worldwide, according to latest published data by world bank in july 2014 individual data points may be more than 10 years old. I mean, without decomposing into within and between groups, i want to estimate only the gini with the by option.
I will discuss the gini coefficient and relate it to the relative mean difference. In my function, fex 19968, ginicoeff requires two variables. The alertness line level of gini coefficient arxiv. The index is based on the gini coefficient, a statistical dispersion measurement that ranks income distribution on a scale between 0 and 1. The gini coefficient is equal to the area below the line of perfect equality 0. 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 income. Pdf the gini index is a summary statistic that measures how equitably a resource is distributed in a population. I have to calculate the gini coefficient for the provinces of iran in the following way first, i will divide household income by the number of people in each household and earn per capita income.
The gini index is the gini coefficient expressed as a percentage, and is equal to the gini coefficient multiplied by 100. Gini coefficient diagram, based on the version by bluemoosebenfrantzdale. We provide a description of the gini coefficient and some. The range of the gini coefficient goes from 0 no concentration to \\sqrt\fracn1n\ maximal concentration. The bias corrected gini coefficient goes from 0 to 1.
The gini coefficient is one of the most commonly used indicators for measuring distribution. 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. In this case, the gini coefficient is 0 and it means there is perfect distribution of income everyone earns the same amount. If a 0, the gini coefficient becomes 0, which means perfect equality, whereas if b 0, the gini coefficient becomes 1, which means complete inequality. Ini didasarkan pada kurva lorenz, yaitu sebuah kurva pengeluaran kumulatif yang membandingkan distribusi dari suatu variable tertentu misalnya pendapatan dengan distribusi uniform seragam yang mewakili persentase kumulatif penduduk. See examples for a pointer to a pdf document including mathematical details about the function. Naturally, we begin our arguments with the classical index of gini. Gini ratio rasio gini atau koefisien adalah alat mengukur derajat ketidakmerataan distribusi penduduk. Gini coefficient expenditure per capita by population group 2006, 2009, 2011 and 2015 22 figure 2. Estimating gini coefficient based on hurun report and.
Share of income going to the bottom 40% in south africa 2006, 2009, 2011 and 2015 23 figure 2. If a 0, it means the lorenz curve is actually the line of equality. In other words, it is double the area between the lorenz curve and the line. Examples of parametric distributions with such pdfs can be found in, e.
Pdf the gini index and measures of inequality researchgate. The gini coefficient, gini index, or coefficient of concentration is a concept that comes up for example in economics, when looking at the distribution of incomes. Gini coefficient measures the inequality of wealth distribution or income inequality in a particular area. It was developed by the italian statistician corrado gini in 1912 definition. The gini coefficient is a measure of inequality of a distribution. Poverty trends in south africa statistics south africa. Share of income for bottom 40% of income earners by population. The gini index or gini coefficient is a statistical measure of distribution developed by the italian statistician corrado gini in 1912. The coefficient ranges from 0 or 0% to 1 or 100%, with 0. Gini coefficient and lorenz curve explained towards data science. Information from its description page there is shown below.
The gini coefficient measures the inequality among values of a frequency distribution. The gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality where everyone has the same income and 1 corresponds with perfect inequality where one person has all the income, and everyone else has zero income. Pdf the gini coefficient as a measure of disproportionality. It was developed by italian statistician and sociologist corrado gini in. This paper stems from work done by the authors at the mathematics for social justice workshop held in june of 2007 at middlebury college. The coefficient measures the degree the degree of concentration in a countrys income distribution. If the inline pdf is not rendering correctly, you can download the pdf file here. The measure has been in use since its development by. A value of 0 represents absolute equality, a value of 100 absolute inequality. Data and research on social and welfare issues including families and children, gender equality, gini coefficient, wellbeing, poverty reduction, human capital and inequality. The higher the coefficient is, the greater the income gap in a society.
Applying the gini coefficient to measure inequality of water use in. Thus a gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. The gini coefficient ranges between 0 and 1 or it can also be expressed as a number from 0 to 100 and is given by the ratio of the areas. Gini index is equals to area a divided by area a and b 4. I had seen the command inequal but this doesnt have a by option. The main contributions of section 3 is to present and.
Notes on how to compute gini coefficient suppose you are given data like this. Hi b, thank you for your question about a point that is often misunderstood. The use of the gini coefficient in dendrochronology is described by biondi and qeadan 2008. Social statisticians today use many different inequality measures, but none more than the gini coefficient. Gini index world bank estimate world bank, development research group. A comparative study of the gini coefficient estimators based on the. 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. Hence, decomposition method is not an independent method for calculating the coefficient, but a method to decompose the coefficient and study the relationship among gini coefficients of different groups. For example, the 9010 ratio takes the ratio of the top 10% of. While a perfect scenario would be that of equality in income distribution, this is not normally the case in most of the areas around the world. 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. This pdf is not so directly available from the data, as presented. If the area between the line of perfect equality and lorenz curve is a, and the area under the. Gini coefficient and the lorentz curve file exchange.
The gini index was developed by gini, 1912, and it is strictly linked to the representation of income inequality through the lorenz curve. So, if we measure income inequality in your neighborhood, you would get a much different coefficient than if you measured it across your entire. The gini coefficient for household income in china the gini coefficient is an economic indicator measuring household income distribution. Incomes are more equally distributed and fewer people are poor where social spending is high.
Can anyone please let me know how all the four parts of that question number 4. She teaches economics at harvard and serves as a subjectmatter expert for media outlets including reuters, bbc, and slate. This is a list of countries or dependencies by income inequality metrics, including gini coefficients. 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. 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. Table distribution of income or consumption in tables world development indicators the world bank 2014. You can think of the horizontal axis as percent of people and the vertical axis as the percent of income those people receive.
This is similar to calculating the gini coefficient for wage separately for each combination of team and year. Gini coefficient does, we can take the ratio of incomes at two points in the distribution. It was developed by the italian statistician and sociologist corrado gini and published in his 1912 paper variability and mutability. Calculating gini coefficient by decomposition method always depends on some known gini coefficient values of separated groups.
Gini coefficient and lorenz curve explained towards data. 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 everyone else has zero. A lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting. The gini coefficient is derived from the lorenz curve, which sorts the population from poorest to richest, and shows the cumulative proportion of the population on. The gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality where everyone has the same income and 1 corresponds with perfect inequality where one person has all the incomeand everyone else has no income. For more information and methodology, please see povcalnet. 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. The gini coefficient also known as the gini index or gini ratio is a measure of differences in income. The difference between the gini coefficients for market. In all countries, the gini coefficient for disposable income exhibits less inequality than the gini coefficient for market income, as taxes and transfers redistribute income to lowerincome households. From the classical gini index of income inequality to a new zenga. The lorentz curve is a graphical representation of this inequality which is intimately related to the gini coefficient. Although gini coeffi cients are generally used to measure income inequality, some refer to market incomes i.
How to calculate gini index for binary classification. The gini coefficient is defined as a ratio of the areas on the lorenz curve diagram. It is a measure of the inequality of a distribution, a value of 0. The gini coefficients in ginidesc are calculated using my program ineqdeco. The gini coefficient is a numerical statistic used to measure income inequality in a society. The gini coefficient is usually a number between 0 and 1 or 0 to 100. Measure of the deviation of the distribution of income among individuals or households within a country from a perfectly equal distribution. A mathematical model of the gini coefficient and evaluation of the redistribution function of the tax system in the czech republic. Gini ranges from 0 to 1, where 0 means perfect equality everyone has the same incomewealth and 1 means absolute inequality one person gets the whole incomewealth and the others get nothing. The gini coefficient was first defined in a 1912 paper by the italian economist corrado gini 18841965. Save it in an easily accessible location, such as a folder on your desktop or in your personal folder.
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