Gini Coefficient

Another measure of inequality is Gini Coefficient, named after the Italian sociologist and statistician Corrado Gini. (Be sure not to confuse this with GNI, which is the gross national income.) It is is calculated using a number of financial indicators, and is expressed as either a decimal or a percentage. A country in which every resident has the same income would have a Gini coefficient of 0 (or 0 percent). A country in which one resident earned all the income, while everyone else earned nothing, would have an income Gini coefficient of 1 (or 100 percent). Thus, the higher the number (the closer to that one person having all the income or wealth), the more inequality there is.

Other gauges are a bit more direct: To indicate the level of poverty within a nation or region, researchers calculate the percentage of the population living beneath various poverty thresholds. A common measure is to consider the percentage of a nation’s population living on less than $1.90 per day, which is commonly known as the International Poverty Line. (Note that United States dollars are often used as a global standard in these types of measurement.) The table in the next sub-section uses this method.

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