How this calculator works
A Lorenz curve plots the cumulative share of income received against the cumulative share of the population, from poorest to richest. The line of perfect equality runs diagonally; the Lorenz curve sags below it as income becomes more concentrated. Area A is the gap between the line of equality and the Lorenz curve, and area B is the area below the curve. Dividing A by A plus B gives the Gini coefficient: zero when area A is zero and one when a single person receives all income. Because the areas together make half the unit square, the coefficient is also twice area A. A summary number hides where in the distribution the inequality sits, and it responds differently to transfers at the bottom and at the top.
Formula
Gini coefficient = area A / (area A + area B). Rearranged, area A = Gini × area B / (1 - Gini) and area B = area A × (1 - Gini) / Gini. On a unit square the coefficient equals 2 × area A because area A + area B = 0.5.
Worked example
Area A of 0.2 and area B of 0.3 give a Gini coefficient of 0.2 / 0.5 = 0.4, or 40%. With a coefficient of 0.4 and area B of 0.3, area A is 0.4 × 0.3 / 0.6 = 0.2.
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Frequently asked questions
What does a Gini of 0.4 mean?
It is a summary of how unevenly income is distributed. A value of zero means every household has the same income and one means one household has everything. Values around 0.3 to 0.4 are common in advanced economies, but definitions and survey methods differ.
Does the Gini measure wealth or income?
It can measure either, but the two give different answers. Wealth is far more concentrated than income in most countries, so a wealth Gini is usually much higher than an income Gini.
What are the limits of the Gini?
It cannot distinguish a transfer from the middle to the bottom from one at the top, and it is sensitive to the income definition, household size adjustment and treatment of negative or zero incomes. Use it alongside shares and percentile ratios.