A Gini Coefficient Calculator helps users quantify the level of inequality in income or wealth distribution among a population. It is especially useful for researchers, economists, and policy-makers who need to assess socio-economic policies and their impacts.
Formula of Gini Coefficient Calculator
To calculate the Gini Coefficient, we use the following formula:
Where:
- G: Gini coefficient
- Xi: Income or wealth of individual i
- n: Total number of individuals
This formula calculates the absolute differences between all pairs of individuals within a dataset, divided by the total income or wealth multiplied by twice the number of observations.
Utility Table
Below is a table that includes general terms and conversions used in Gini Coefficient calculations. This resource helps users easily find key information relevant to their needs without performing calculations each time.
| Term | Description |
|---|---|
| Gini Coefficient | Measure of statistical dispersion |
| Income Distribution | Allocation of income across individuals |
| Wealth Distribution | Allocation of wealth across individuals |
Example of Gini Coefficient Calculator
Let's calculate the Gini Coefficient for a small economy where five individuals have the following incomes: 10, 20, 30, 40, and 50 units.
- First, list all incomes: 10, 20, 30, 40, 50.
- Compute the differences in income between each pair of individuals and take the absolute values:
- |10-20| = 10, |10-30| = 20, |10-40| = 30, |10-50| = 40, etc.
- Sum all the absolute differences obtained in step 2.
- Use the formula for the Gini Coefficient: G = Sum of absolute differences / (2 * n * Total income).
- Here, n = 5 (number of individuals), and Total income = 150.
- Calculate G = Sum of absolute differences / (2 * 5 * 150).
Most Common FAQs
A Gini Coefficient of 0 represents perfect equality, where everyone has the same income.
It helps policy makers understand the extent of inequality in a society and guide the development of more equitable economic policies.