Assignment-5

GINI COEFFICIENT

Prepared for:

Dr. M.Z.Mamun
Course Instructor
Statistics and Decision Analysis (K 502)

Prepared by:

Name : Mouri Rezawana

Roll : 114
Batch :MBA 44D (Sec B)

Institute of Business Administration, Dhaka University

August 3, 2010

Gini Coefficient
The Gini Coefficient is a measure of statistical dispersion developed by
the Italian statistician Corrado Gini and published in his 1912 paper "Variability and Mutability".

It is an inequality indicator. The Gini coefficient measures the inequality of income distribution
within a country. It varies from zero, which indicates perfect equality, with every household
earning exactly the same, to one, which implies absolute inequality, with a single household
earning a country's entire income. Latin America is the world's most unequal region, with a Gini
coefficient of around 0.5. In rich countries the figure is closer to 0.3. It has found application in
the study of inequalities in disciplines as diverse as economics, health
science, ecology, chemistry and engineering. It is commonly used as a measure of inequality
of income or wealth.

The Gini coefficient can range from 0 to 1. It is sometimes multiplied by 100 to range between 0
and 100. A low Gini coefficient indicates a more equal distribution, with 0 corresponding to
complete equality, while higher Gini coefficients indicate more unequal distribution, with 1
corresponding to complete inequality. To be validly computed, no negative goods can be
distributed. Thus, if the Gini coefficient is being used to describe household income inequality,
then no household can have a negative income. When used as a measure of income inequality,
the most unequal society will be one in which a single person receives 100% of the total income
and the remaining people receive none (G=1); and the most equal society will be one in which
every person receives the same percentage of the total income (G=0).

Country Name Gini Coefficient Date of Information

Sweden 23.0 2005

Norway 25.0 2008

Denmark 29.0 2007

Finland 29.5 2007

Bangladesh 33.2 2005

Haiti 59.2 2001

 Mozambique 43.7 2002

Nepal 47.2 2008

Zambia 50.8 2004

Namibia 70.7 2003

Source: CIA Factbook

The difference between the gini coefficient of rural and urban in Bangladesh is 13.1