Gini Index

(noun)

A measure of income distribution.

Related Terms

Examples of Gini Index in the following topics:

  • Measurement Problems

    • The most popular measurement of income inequality is the Gini index, which leverages a simple scale of 0-1 to derive deviance from a given perfect equality point.
    • If a system demonstrates a Gini index of 0, the implication is that income differences among any individuals in the population will be essentially zero, while a measurement of 1 is complete income disparity.
    • That bottom 10% (assuming inflation has been accounted for) will be gaining wealth and purchasing power in absolute terms despite the fact that the Gini index will be much worse.
    • The Gini index still has important implications about relative inequality in this circumstance, but it neglects to point out positive gains.
    • Taking into account the problems with the Gini ratio, a concept like the poverty line does an effective job in offsetting this variability.

  • Economic measures

    • The Gini coefficient (also known as the Gini index or Gini ratio) is a measure of statistical dispersion intended to represent the income distribution of a nation's residents.
    • The Gini coefficient measures the inequality among values of a frequency distribution.
    • A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has the same income).
    • A Gini coefficient of one (or 100%) expresses maximal inequality among values (for example where only one person has all the income).
    • The Gini coefficient was originally proposed as a measure of inequality of income or wealth.

  • Defining and Measuring Income Inequality

    • Gini Index: One of the most commonly used income inequality metric is the Gini Index, which uses a straightforward 0-1 scale to illustrate deviance from perfect equality of income.
    • The derivation of the Gini ratio is found via Lorenz curves, or more specifically, the ratio of two areas in a Lorenz curve diagram.
    • This demonstrates the Gini ratio across the globe, with some interesting implications for advanced economies like the U.S.
    • Theil Index:The Theil Index takes a slightly different approach than the rest, identifying entropy within the system.
    • Hoover Index: Often touted as the simplest measurement to calculate, the Hoover Index derives the overall amount of income in a system and divides it by the population to create the perfect proportion of distribution in the system.

  • Growing Gap Between Rich and Poor

    • There are various numerical indices for measuring economic inequality, but the most commonly used measure for the purposes of comparison is the Gini coefficient (also known as the Gini index or Gini ratio for Italian statistician and sociologist Corrado Gini).
    • The Gini coefficient is a statistical measure of the dispersal of wealth or income.
    • A Gini coefficient of zero indicates that there is perfect equality—assets are equally divided between all people in the group.
    • A Gini coefficient of one indicates that all of a group's wealth is held by one individual.
    • Using Gini coefficients, this map illustrates the extent to which each country in the world has internal inequality, or a gap between its richest and poorest citizens.

  • Measuring Poverty

    • Relative poverty measures are used as official poverty rates in several developed countries and are measured according to several different income inequality metrics, including the Gini coefficient and the Theil Index.

  • Debates over Globalization

    • They challenge directly traditional metrics, such as GDP, and look to other measures, such as the Gini coefficient or the Happy Planet Index, pointing to evidence of social disintegration, the spread of diseases, environmental damage, breakdowns in democracy, and increasing poverty in many of the world's nations as unintended consequences of globalization.

  • Price Indices and the Rate of Change of Prices

    • Most often, the base period for an index is a single year and normalized.
    • The Laspeyres index and the Paasche index are two price indexes that attempt to compensate for this difficulty.
    • Using the example above, the base period index would be 5*10+8*1.5+2*40=142, and the current period index would be 5*12+8*2+2*45 = 166.
    • Again, using the above example, the base period index would be 4*10+6*1.5+2*40=129, and the current period index would be 4*12+6*2+2*45=150.
    • Two common price indices are the Consumer Price Index (CPI) and the Producer Price Index (PPI).

  • Introduction to Index Numbers

    • One such technique is to add different index numbers to a word when it is being used to mean different things.
    • An index number is merely a small number placed just after and slightly lower than the word being indexed.

  • Instructional Scenarios

    • Focuses on a scenario in a language arts class in a suburban American high school (http://epltt.coe.uga.edu/index.php?

  • Group-external and group-internal ties

    • The E-I index can be applied at three levels: the entire population, each group, and each individual.
    • If we re-scale the observed value of the E-I index (.563) to fall into this range, we obtain a re-scaled index value of -.167.
    • The E-I index can also be calculated for each group and for each individual.
    • E-I index output for the Knoke information network - groups and individuals
    • E-I index output for the Knoke information network - whole network