1. What is the Gini Coefficient?

The Gini coefficient is a measure of statistical dispersion intended to represent income or wealth distribution of a nation's residents. It ranges from 0 (perfect equality) to 1 (perfect inequality).

2. How Does the Calculator Work?

The calculator uses the Gini coefficient formula:

Where:

• \( x_i \) — The values in ascending order
• \( i \) — The rank of each value (1 to n)
• \( n \) — Total number of values

Explanation: The formula compares the cumulative proportions of the population against cumulative proportions of income they receive.

3. Interpretation of Gini Coefficient

Details:

• 0 = Perfect equality (everyone has exactly the same income)
• 0.2-0.3 = Relatively equal distribution
• 0.4-0.5 = High inequality
• 1 = Perfect inequality (one person has all the income)

4. Using the Calculator

Tips: Enter comma-separated values (e.g., incomes, wealth measurements). The calculator will sort them and compute the Gini coefficient.

5. Frequently Asked Questions (FAQ)

Q1: What's a "good" Gini coefficient?
A: There's no universal standard, but generally coefficients below 0.3 represent relatively equal distribution, while above 0.4 indicate significant inequality.

Q2: How does this compare to the Lorenz curve method?
A: This formula gives identical results to the area-under-Lorenz-curve method but is computationally simpler.

Q3: What are limitations of the Gini coefficient?
A: It doesn't show where inequality occurs, is sensitive to outliers, and can't distinguish between different shaped Lorenz curves with same area.

Q4: Can it be used for non-income applications?
A: Yes, it can measure inequality in any distribution (e.g., energy consumption, academic grades, city sizes).

Q5: How many data points are needed?
A: While it works with any number, more points give more reliable results (typically use at least 10-20 for meaningful analysis).