Definition and the Lorenz Curve
The Gini coefficient is a single number between 0 and 1 that measures how unequally income or wealth is distributed. It is derived from the Lorenz curve, which plots the cumulative share of income against the cumulative share of population. The Gini coefficient equals twice the area between the Lorenz curve and the line of perfect equality.
Global Distribution of Gini Values
Nordic countries typically have values around 0.25, while South Africa and Brazil exceed 0.5. Japan sits near the OECD average at around 0.33. However, values change significantly depending on whether income is measured before or after taxes and social transfers, so the basis of comparison must always be specified.
Limitations and Misuse
The Gini coefficient compresses an entire distribution into one number, meaning different distribution shapes can produce the same value. Concentration at the top versus poverty at the bottom have very different policy implications but cannot be distinguished by the Gini alone.
Furthermore, looking only at income misses wealth inequality and intergenerational gaps. Multiple indicators should be combined for a comprehensive assessment of inequality.
Meaning in MyRank
When checking your income ranking on MyRank, keep in mind that countries with high Gini coefficients have larger absolute differences at the same percentile. Your ranking's real-world meaning depends on the shape of income distribution in your country.