The Gini coefficient

Arguably nothing is more important in politics that inequalities in power and wealth. Power is hard to measure and wealth is often used as a kind of proxy measure.

Now inequalities in wealth can be measured in many ways but a well-accepted instrument is the Gini coefficient . This is a measure of statistical dispersion developed by the Italian statistician Corrado Gini and published in his 1912 paper “Variability and Mutability”.

The mathematics of the Gini coefficient is complicated (at least for non-mathematicians) but the coefficient can be represented simply as an index between 0, meaning total equality of distribution (everyone owns the same amount), and 100, meaning total inequality (one person owns everything).

As you will see from this graph, most developed Western economies have a Gini coefficient between 24-36 (with Scandinavian countries tending to have the lowest scores), but the United States, Mexico and Brazil have coefficients above 40 because their societies are so unequal. China – which I shall be visiting in a few days – has a rising Gini coefficient as inequalities rise between cities and villages, between east and west.

In their book “The Spirit Level” – which is high on my reading list – Richard Wilkinson and Kate Pickett argue that inequality is the root cause of many of society’s ills. A mass of evidence is marshalled to demonstrate that levels of violent crime, mental illness, drug addiction, illiteracy, obesity and so on are almost always higher in more unequal societies.


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