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Thus, a Gini coefficient that increases over time indicates rising income inequality." "The Gini coefficient can also be interpreted as a measure of one-half of the average difference in income between every pair of households in the population, divided by the average income of the total population.
A score of "0" on the Gini coefficient represents complete equality, i.e. every person has the same income. A score of 1 would represent the case in which one person would have all the income and others would have none. Therefore, a lower Gini score is roughly associated with a more equal distribution of income and vice versa.
The Italian statistician Corrado Gini developed the Gini coefficient and published it in his 1912 paper Variabilità e mutabilità (English: variability and mutability). [16] [17] Building on the work of American economist Max Lorenz, Gini proposed using the difference between the hypothetical straight line depicting perfect equality and the actual line depicting people's incomes as a measure ...
The Gini coefficient is a number between 0 and 1 or 100, where 0 represents perfect equality (everyone has the same income). Meanwhile, an index of 1 or 100 implies perfect inequality (one person has all the income, and everyone else has no income).
For example, in the chart at right, US income share of top earners was approximately constant from the mid-1950s to the mid-1980s, then increased from the mid-1980s through 2000s; this increased inequality was reflected in the Gini coefficient.
Gini coefficient US William Lazonick, an economics professor at UMass Lowell, describes the results of that transformation in his 2012 paper , "The Financialization of the US Corporation: What Has ...
The information in a Lorenz curve may be summarized by the Gini coefficient and the Lorenz asymmetry coefficient. [1] The Lorenz curve cannot rise above the line of perfect equality. A Lorenz curve that never falls beneath a second Lorenz curve and at least once runs above it, has Lorenz dominance over the second one. [5]
The closer the Gini Coefficient is to one, the closer its income distribution is to absolute inequality. In 2007, the United Nations approximated the United States' Gini Coefficient at 41% while the CIA Factbook placed the coefficient at 45%. The United States' Gini Coefficient was below 40% in 1964 and slightly declined through the 1970s.