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Inequality: The Gini Coefficient

Geoff Riley

15th April 2014

The Gini coefficient ranges from zero, when everyone has the same income, to 1, when a single individual receives all the income. A Gini coefficient above 0.4 is often seen as an important point. Inequality above this level is frequently associated with political instability and growing social tensions.

Revision video on the Gini Coefficient

The Gini Index for Sub Saharan African Countries

Gini coefficients for a selection of countries

(Data is taken from the World Bank databank, most recent published data is used, mainly for 2008-09)

Country Name Gini Coefficient Value Country Name Gini Coefficient Value
Brazil 53.9 China 41.5
Thailand 53.6 India 36.8
Mexico 51.7 Indonesia 36.8
Kenya 47.7 Poland 34.2
Malaysia 46.2 Hungary 31.2
Argentina 45.8 Ukraine 27.5
Uganda 44.3 Belarus 27.2
Russian Federation 42.3 United Kingdom 36.1

Inequality is substantially higher in developing than in advanced economies.

  • 1.Thinking about countries with much higher values for the Gini coefficient, can you think of reasons why income inequality is much higher?
  • 2.Considering countries with lower levels of income inequality – can you spot anything about those countries selected that might explain why their Gini coefficient is lower than for the UK?
  • 3.If you were constructing a Gini coefficient for wealth rather than income, would you expect inequality to be higher or lower for the United Kingdom?

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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