GINI coefficient
Definition
The GINI coefficient is a measure ranging from 0 to 1 that evaluates the inequality of income distribution within a population, where 0 represents perfect equality and 1 signifies maximum inequality. It helps sociologists and economists understand the extent of income disparity among different groups in a society.
Analogy
Consider the GINI coefficient as grading how evenly a cake is divided among party guests. A score of 0 means everyone got an equal slice (perfect equality), while a score of 1 indicates one person took the whole cake for themselves (maximum inequality), showcasing the fairness in distribution.
Related terms
Income Inequality: The uneven distribution of income across various participants in an economy, highlighting disparities in wealth accumulation.
Economic Disparity: Refers to the large differences in wealth and income seen between different socio-economic groups within society, often leading to social tension and reduced economic mobility.
Poverty Line: A threshold set by governments or organizations, indicating the minimum level of income deemed necessary to achieve an adequate standard of living in a given country or region
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