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Measuring inequality: the Gini Index1
Math 128 – Fall 2005
Introduction Most people would agree that “good things,” such as money income, should be more or less
equally distributed. In practice, of course, good things are not evenly distributed, and so it’s useful to have
a numerical measure of inequality. We might, for instance, watch such a measure over several years to decide
whether equity is increasing or decreasing.
The Gini Index (GI) is such a measure. It is widely used used by economists to measure and compare
income equality in various countries, or in a given country over time. A GI of 0.00 corresponds to perfect
equality—everyone has exactly the same income. A GI of 1.00 corresponds to perfect inequality—one person
gets all the income and everyone else gets nothing.
No real-world society has perfect income equality (or complete inequality), and there are good political,
moral, and economic arguments to be had about how much income equality is “best” in a given society.
Calculating the Gini Index mathematically does not settle these arguments—the disagreements are philo-
sophical, not just mathematical. But knowing the Gini Index can lend some quantitative weight to the
discussion.
GI information is easy to find on the Web. Here, for instance, are some rough GI data on family income
in various countries, culled from the CIA World Factbook. (The GI is reported here as a percent, ranging
from 0 to 100.)
Denmark 24.7 Russia 39.9
Japan 24.9 China 40.0
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