Inequality: The Gini Coefficient

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)

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?