Income Inequality Vs. Gini Coefficient Analysis

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First things first, what is income inequality? Income inequality can be summed up as a difference between the incomes and wealth of households across a given area. This difference is calculated with something called the Gini Coefficient. The Gini Coefficient serves to determine the degree to which incomes vary among a given sample size of individuals. The Gini coefficient is on a scale of zero to one. When a country, for example, has a Gini coefficient of zero, that country would have perfect income equality. What that means is that every person in the sample would have perfectly equal income. On the other hand, a Gini coefficient of one would mean that one person has all of the income in a given sample or in other words, perfect inequality. Both of these scenarios are negative for fairly obvious reasons. That means that an ideal Gini coefficient is somewhere between zero and one. Though it is not clear exactly what a healthy Gini coefficient is, there are a few known sources that effect the Gini Coefficient. Accurately measuring the inequality of income is frequently used to determine how well a society is doing and is utilized as reason to enact new policies for income redistribution. (Gini Coefficient citation somewhere in this paragraph)
In the US, the Gini coefficient …show more content…
Therefore, it should be asked whether or not it is the most basic aspects of our economic state that brought us to the current amount of inequality. The answer would be, yes, they do exist and comprehending them and their impact is pivotal for deciding what policy is should be constructed to serve people better with the information that the aforementioned aspects. In his paper on income distribution, David Levy outlines specific terms causes of income inequality. The aspects Levy asserts are growing markets, technology, immigration, income mobility, family structure, and property rights. (Levy citation.
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