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Inequality

The Gini index is a measure of income inequality. If everyone in a population earns exactly the same income its value is 0. For maximum inequality its value is 1, or 100%. How it's calculated is a bit complex, but one way to think about it is this: take two random members of the population and determine the difference in their incomes, compared to the mean income. Do this many times and take the average.

The comparison with the mean is important, because it allows you to compare different populations with different mean income, a rich country with a poor country. But it also has the interesting effect that the Gini index is particularly sensitive to income disparities around the mean. There are other ways of measuring income inequality, like comparing the total income of a small percentage at the top with that of a larger percentage at the bottom, but this is not so sensitive to disparities around the middle.

Anyway, here is a graph of 60 years' worth of data for the United States:

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