Monday, July 21, 2008

The Gini index of income and wealth distribution

The first two countries in the world with the most equal income and wealth distribution are constitutional monarchies!

The Gini coefficient was developed by the Italian statistician Corrado Gini and published in his 1912 paper „Variability and Mutability“ (Variabilità e mutabilità). It is a measure of statistical dispersion most prominently used as a measure of inequality of income distribution or inequality of wealth distribution. It is defined as a ratio with values between 0 and 1: A low Gini coefficient indicates more equal income or wealth distribution, while a high Gini coefficient indicates more unequal distribution. 0 corresponds to perfect equality (everyone having exactly the same income) and 1 corresponds to perfect inequality (where one person has all the income, while everyone else has zero income). The Gini coefficient requires that no one have a negative net income or wealth. Worldwide, Gini coefficients range from 0.23 in Sweden to 0.707 in Namibia.

The Gini index is the Gini coefficient expressed as a percentage, thus Serbia’s Gini index is 30% (Mathematically, this is equal to the Gini coefficient of 0.3, but the percentage sign is often omitted in the Gini index.)

Rank

Country

Gini index (by CIA)

Year

of est.

1.

Sweden

23

2005

2.

Denmark

24

2005

3.

Slovenia

24

2005

4.

Iceland

25

2005

5.

Luxembourg

26

2005

6.

Czech Republic

26

2005

7.

Slovakia

26

2005

8.

Finland

26

2005

9.

Austria

26

2005

10.

B and H

26.2

2001

11.

Albania

26.7

2005

12.

Norway

28

2005

13.

Belgium

28

2005

14.

Hungary

28

2005

15.

Germany

28

2005

16.

France

28

2005

17.

Malta

28

2005

18.

Croatia

29

2001

19.

Cyprus

29

2005

20.

Belarus

29.7

2002

21.

Ethiopia

30

2000

22.

Montenegro

30

2003

23.

Serbia

30

2003

24.

Kyrgyzstan

30.3

2003

25.

Pakistan

30.6

2002

26.

Netherlands

30.9

2005

27.

Ukraine

31

2006

28.

Romania

31

2005

29.

Bulgaria

31.6

2005

30.

Spain

32

2005