Editing Gini coefficient (section)

== Of income distributions ==
{{See also|List of countries by income equality}}
{{Lorenz curve global income 2011.svg}}

Gini coefficients of income are calculated on a market income and a disposable income basis. The Gini coefficient on market income—sometimes referred to as a pre-tax Gini coefficient—is calculated on income before taxes and transfers. It measures inequality in income without considering the effect of taxes and social spending already in place in a country. The Gini coefficient on disposable income—sometimes referred to as the after-tax Gini coefficient—is calculated on income after taxes and transfers. It measures inequality in income after considering the effect of taxes and social spending already in place in a country.<ref name=OECD1 /><ref>{{cite journal|title=Applications of Lorenz Curves in Economic Analysis|first=N. C.|last=Kakwani|journal=Econometrica|volume=45|issue=3|date=April 1977|pages= 719–728|jstor=1911684|doi=10.2307/1911684}}</ref><ref name=imf2000>{{cite web|title=Income Distribution and Tax and Government Social Spending Policies in Developing Countries|publisher=International Monetary Fund|date=March 2000|last1=Chu|first1=Ke-young|last2=Davoodi|first2=Hamid|last3=Gupta|first3=Sanjeev|url=http://www.imf.org/external/pubs/ft/wp/2000/wp0062.pdf |archive-url=https://web.archive.org/web/20000830022345/http://www.imf.org/external/pubs/ft/wp/2000/wp0062.pdf |archive-date=2000-08-30 |url-status=live}}</ref>

For [[OECD]] countries over the 2008–2009 period, the Gini coefficient (pre-taxes and transfers) for a total population ranged between 0.34 and 0.53, with South Korea the lowest and Italy the highest. The Gini coefficient (after-taxes and transfers) for a total population ranged between 0.25 and 0.48, with Denmark the lowest and Mexico the highest. For the United States, the country with the largest population among OECD countries, the pre-tax Gini index was 0.49, and the after-tax Gini index was 0.38 in 2008–2009. The OECD average for total populations in OECD countries was 0.46 for the pre-tax income Gini index and 0.31 for the after-tax income Gini index.<ref name=OECD1 /><ref>{{cite web |url=http://www.eurofound.europa.eu/areas/qualityoflife/eurlife/index.php?template=3&radioindic=158&idDomain=3 |title=Monitoring quality of life in Europe – Gini index |work=Eurofound |date=26 August 2009 |url-status=dead |archive-url=https://web.archive.org/web/20081201193249/http://www.eurofound.europa.eu/areas/qualityoflife/eurlife/index.php?template=3&radioindic=158&idDomain=3 |archive-date=1 December 2008 |df=dmy-all }}</ref> Taxes and social spending that were in place in 2008–2009 period in OECD countries significantly lowered effective income inequality, and in general, "European countries—especially Nordic and Continental [[welfare states]]—achieve lower levels of income inequality than other countries."<ref>{{cite journal|title=The redistributive effect of social transfer programmes and taxes: A decomposition across countries|first1=Chen|last1=Wang|first2=Koen|last2=Caminada|first3=Kees|last3=Goudswaard |journal=International Social Security Review|volume=65|issue=3|pages=27–48|year=2012|doi=10.1111/j.1468-246X.2012.01435.x|s2cid=154029963|hdl=1887/3207160|hdl-access=free}}</ref>

Using the Gini can help quantify differences in [[Welfare spending|welfare]] and [[living wage|compensation]] policies and philosophies. However, it should be borne in mind that the Gini coefficient can be misleading when used to make political comparisons between large and small countries or those with different immigration policies (see [[#Limitations|limitations]] section).

The Gini coefficient for the entire world has been estimated by various parties to be between 0.61 and 0.68.<ref name=fao2009 /><ref name=undp10>{{cite book|title=The Real Wealth of Nations: Pathways to Human Development, 2010|publisher=United Nations Development Program|year=2011|pages=72–74|isbn= 978-0-230-28445-6|url=http://hdr.undp.org/en/media/HDR_2010_EN_Complete_reprint.pdf|archive-url=https://web.archive.org/web/20110429050250/http://hdr.undp.org/en/media/HDR_2010_EN_Complete_reprint.pdf|archive-date=29 April 2011|last1=Nations |first1=United }}</ref><ref>{{cite web|url=http://siteresources.worldbank.org/INTDECINEQ/Resources/PSBSutcliffe.pdf |archive-url=https://web.archive.org/web/20070621041257/http://siteresources.worldbank.org/INTDECINEQ/Resources/PSBSutcliffe.pdf |archive-date=2007-06-21 |url-status=live|title=Postscript to the article 'World inequality and globalization' (Oxford Review of Economic Policy, Spring 2004)
|first=Bob|last=Sutcliffe|date=April 2007|access-date=13 December 2007}}</ref> The graph shows the values expressed as a percentage in their historical development for a number of countries.
[[File:Gini since WWII.svg|thumb|center|upright=3.25|alt=The change in Gini indices has differed across countries. Some countries have change little over time, such as Belgium, Canada, Germany, Japan, and Sweden. Brazil has oscillated around a steady value. France, Italy, Mexico, and Norway have shown marked declines. China and the US have increased steadily. Australia grew to moderate levels before dropping. India sank before rising again. The UK and Poland stayed at very low levels before rising. Bulgaria had an increase of fits-and-starts. .svg alt text]]

=== Regional income Gini indices ===
According to UNICEF, Latin America and the Caribbean region had the highest net income Gini index in the world at 48.3, on an unweighted average basis in 2008. The remaining regional averages were: sub-Saharan Africa (44.2), Asia (40.4), Middle East and North Africa (39.2), Eastern Europe and Central Asia (35.4), and High-income Countries (30.9). Using the same method, the United States is claimed to have a Gini index of 36, while South Africa had the highest income Gini index score of 67.8.<ref name=unicef2011>{{cite web|title=Global Inequality: Beyond the Bottom Billion|publisher=UNICEF|date=April 2011|first1=Isabel|last1=Ortiz|first2=Matthew|last2=Cummins|page=26|url=http://www.unicef.org/socialpolicy/files/Global_Inequality_REVISED_-_5_July.pdf|access-date=30 July 2012|archive-date=12 August 2012|archive-url=https://web.archive.org/web/20120812232455/http://www.unicef.org/socialpolicy/files/Global_Inequality_REVISED_-_5_July.pdf|url-status=dead}}</ref>

=== World income Gini index since 1800s ===
Taking income distribution of all human beings, worldwide income inequality has been constantly increasing since the early 19th century (and will keep on increasing over the years) . There was a steady increase in the global income inequality Gini score from 1820 to 2002, with a significant increase between 1980 and 2002. This trend appears to have peaked and begun a reversal with rapid economic growth in emerging economies, particularly in the large populations of [[BRIC (economics term)|BRIC]] countries.<ref>{{cite journal|title=More or Less|journal=Finance & Development|date= September 2011|volume= 48|issue= 3|first=Branko|last=Milanovic|url=http://www.imf.org/external/pubs/ft/fandd/2011/09/milanovic.htm}}</ref>

The table below presents the estimated world income Gini coefficients over the last 200 years, as calculated by Milanovic.<ref>{{Cite web |last= Milanovic |first= Branko |year= 2009 |title= Global Inequality and the Global Inequality Extraction Ratio |publisher=World Bank|url=http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2009/09/09/000158349_20090909092401/Rendered/PDF/WPS5044.pdf |archive-url=https://web.archive.org/web/20131111142720/http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2009/09/09/000158349_20090909092401/Rendered/PDF/WPS5044.pdf |archive-date=2013-11-11 |url-status=live}}</ref> 
{| class="wikitable" style="text-align: center;"
|+ Income Gini coefficient - World, 1820–2005
|-
! Year !! World Gini coefficients<ref name=fao2009 /><ref name=unicef2011 /><ref>{{cite web|title=Riding the Elephants: The Evolution of World Economic Growth and Income Distribution at the End of the Twentieth Century (1980–2000)|first1=Albert|last1=Berry |first2=John|last2=Serieux |publisher=United Nations (DESA Working Paper No. 27)|date=September 2006|url=https://www.un.org/esa/desa/papers/2006/wp27_2006.pdf |archive-url=https://web.archive.org/web/20090217064745/http://www.un.org/esa/desa/papers/2006/wp27_2006.pdf |archive-date=2009-02-17 |url-status=live}}</ref>
|-
| 1820 || 0.43
|-
| 1850 || 0.53
|-
| 1870 || 0.56
|-
| 1913 || 0.61
|-
| 1929 || 0.62
|-
| 1950 || 0.64
|-
| 1960 || 0.64
|-
| 1980 || 0.66
|-
| 2002 || 0.71
|-
| 2005 || 0.68
|}

More detailed data from similar sources plots a continuous decline since 1988.  This is attributed to [[globalization]] increasing incomes for billions of poor people, mostly in countries like China and India.  Developing countries like Brazil have also improved basic services like health care, education, and sanitation; others like Chile and Mexico have enacted more [[progressive tax]] policies.<ref>{{cite web|url=https://www.npr.org/sections/goatsandsoda/2017/01/25/511594991/what-the-stat-about-the-8-richest-men-doesnt-tell-us-about-inequality|title=What The Stat About The 8 Richest Men Doesn't Tell Us About Inequality| website=NPR | date=25 January 2017 | last1=Gharib | first1=Malaka }}</ref>

{| class="wikitable" style="text-align: center;"
|+ Income Gini coefficient - World, 1988–2013
|-
!Year
!World Gini coefficients<ref>{{cite web| title= Poverty and Prosperity 2016 / Taking on Inequality |url=https://openknowledge.worldbank.org/bitstream/handle/10986/25078/9781464809583.pdf |archive-url=https://web.archive.org/web/20161115132032/https://openknowledge.worldbank.org/bitstream/handle/10986/25078/9781464809583.pdf |archive-date=2016-11-15 |url-status=live |author=World Bank|author-link=World Bank }}. Figure O.10 
Global Inequality, 1988–2013</ref>
|-
|1988 || 0.80
|-
|1993 || 0.76
|-
|1998 || 0.74
|-
|2003 || 0.72
|-
|2008 || 0.70
|-
|2013 || 0.65
|}