Most watched Gini coefficient only show income distribution not low/high income distribution

For many years Gini coefficient has been the measure for showing distribution of wealth or divide between rich and poor or discrepancy of income.

From wikkipedia entry we define : The Gini coefficient (also known as the Gini index or Gini ratio) is a measure of statistical dispersion developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper “Variability and Mutability”.

A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has an exactly equal income). A Gini coefficient of one (100 on the percentile scale) expresses maximal inequality among values (for example where only one person has all the income).

India has Gini coefficient has been 33.4 which is almost equal to ireland or belgium.So it does not show that economy is doing well it only show that india has low per capita income but distributed well among poor. Denmark has best figure good stable high income industry which is clean and and low gini coefficient of .26. Today as there was news China has gini coeffcient of .44 and trying to reduce it. I am sure they will as China willing and speed of implementation is like supersonic speed. While UK gini coefficient  has risen from 0.33 in 70’s to today 0.48 and  gini coefficient of US risen marginally from o.40 in 70’s  to .48 in 2000.

Improving gini coefficient does not reflect anything. If gini coeffient is getting lower means income disparity reducing ..but it can be true average income is reducing ..So combination of per capita income improvement with reducing gini coefficient reflects growth of economy to some extent there are other parameters as well

6 Comments

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