The Gini – coefficient

The Gini coefficient (Gini index or Gini ratio) is a statistical measure of economic inequality in a population.  It  is the ratio  of the area between  the line of perfect  equality  and the Lorenz  curve  to the  total  area of the  square   below  the Lorenz  curve.in on income distribution curve

In the  figure  above,  the  Gini  –  coefficient   is the  ratio  of  the shaded  area  to the total area of the triangle  OAB

Gini coefficient =

The gini – coefficient   varies from zero to one.  The higher the coefficient,   the higher the degree of income inequality.