What is a Gini coefficient OECD?
OECD Statistics. Definition: The Gini index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution.
What is a good Gini coefficient?
Relative to a Gini coefficient of 0, income or wealth is distributed quite equally. A coefficient between 0.3–0.4 indicates that there is adequate equality.
Is 0.4 A high Gini coefficient?
While most developed European nations tend to have Gini coefficients between 0.24 and 0.36, the United States Gini coefficient is above 0.4, indicating that the United States has greater inequality. Using the Gini can help quantify differences in welfare and compensation policies and philosophies.
What does a 5 Gini coefficient of 0.5 mean?
Gini index < 0.2 represents perfect income equality, 0.2–0.3 relative equality, 0.3–0.4 adequate equality, 0.4–0.5 big income gap, and above 0.5 represents severe income gap.
What is OECD scale?
The OECD (Organisation for Economic Co-operation and Development)-modified equivalence scale is used widely across Europe. It adjusts household income to reflect the different resource needs of single adults, any additional adults in the household, and children in various age groups.
How do you calculate Gini coefficient?
The Gini coefficient can be calculated using the formula: Gini Coefficient = A / (A + B), where A is the area above the Lorenz Curve and B is the area below the Lorenz Curve.
What does a Gini coefficient of 1 mean?
The Gini coefficient ranges from 0, indicating perfect equality (where everyone receives an equal share), to 1, perfect inequality (where only one recipient or group of recipients receives all the income).
Who has the highest Gini coefficient?
South Africa
GINI index (World Bank estimate) – Country Ranking
| Rank | Country | Value |
|---|---|---|
| 1 | South Africa | 63.00 |
| 2 | Namibia | 59.10 |
| 3 | Suriname | 57.90 |
| 4 | Zambia | 57.10 |
What does a Gini coefficient of 0.6 mean?
Definition. The Gini coefficient is usually a number between 0 and 1 (or 0 to 100). 0 means a country where the income is equally distributed. On the other hand, 1 means that one person owns everything but the rest owns nothing. In reality, all scores are between 0.25 and 0.6 (between 25 and 60 on the 0 to 100 scale).
What does a Gini coefficient of 0.45 mean?
It is typically used to quantify income inequality in human populations, and in that case a gini index of 0 would mean that everyone earns exactly the same, while 1 would mean that one person earns all the money there is. A country like the United States has a gini index of 0.45.
How do you use the OECD equivalence scale?
The equivalence factor is built up by allocating points to each person in a household (1 point to the first adult, 0.5 points to each additional person who is 15 years and over, and 0.3 to each child under the age of 15) and then summing the equivalence points of all household members.
How do you calculate Equivalized household income?
The equivalised income is calculated by dividing the household’s total income from all sources by its equivalent size, which is calculated using the modified OECD equivalence scale.