Gini Coefficient Calculator

What is the Gini Coefficient?

The Gini coefficient is a statistical measure of inequality in a distribution, ranging from 0 (perfect equality) to 1 (maximum inequality). Developed by Italian statistician Corrado Gini in 1912, it has become the most widely used single-number summary of income and wealth inequality worldwide. The coefficient is used by economists, sociologists, policymakers, and data scientists to measure disparities in everything from income and healthcare access to educational attainment and market concentration. For other statistical tools, try the Standard Deviation Calculator or Coefficient of Variation Calculator.

The Gini coefficient is calculated using the Lorenz curve, which plots the cumulative share of total income or wealth held by the cumulative share of the population. The further the Lorenz curve bows below the 45-degree line of perfect equality, the greater the inequality and the higher the Gini coefficient.

How the Gini Coefficient is Calculated

Calculating the Gini coefficient involves a straightforward process. First, all values are sorted in ascending order and the cumulative shares of both the population and the value are computed. The area under the Lorenz curve (B) is then calculated using the trapezoidal rule. The Gini coefficient is derived as G = (0.5 - B) / 0.5, which is equivalent to the ratio of the area between the line of perfect equality and the Lorenz curve to the total area under the line of perfect equality.

Interpreting Gini Coefficient Values

A Gini coefficient below 0.2 indicates very low inequality, where the distribution is highly equal. Values between 0.2 and 0.3 represent low inequality with relatively modest differences. The range of 0.3 to 0.40 is considered moderate inequality, typical of many developed nations. Values between 0.40 and 0.50 indicate high inequality with significant concentration of resources. Anything above 0.50 represents very high to extreme inequality. For reference, Scandinavian countries typically have Gini values around 0.25-0.30, while some developing nations can exceed 0.60.

Limitations of the Gini Coefficient

While widely used, the Gini coefficient has several important limitations. Different Lorenz curves can produce the same Gini value, so it cannot reveal where in the distribution inequality occurs. The coefficient requires all values to be non-negative and does not account for absolute living standards - a wealthy country and a poor country can have the same Gini value. For very small datasets, the Gini coefficient may not be reliable. Despite these limitations, it remains an essential tool for understanding and comparing inequality across populations and over time. Explore more with the Quartile Calculator and Percentile Calculator for distribution analysis.