Gini Coefficient and Lorenz Curve Explained
The Gini coefficient is a widely used measure of income or wealth inequality within a population, derived from the Lorenz curve.
The Gini coefficient is a widely used measure of income or wealth inequality within a population, derived from the Lorenz curve.
How it works
The Gini coefficient ranges from 0 to 1: a value of 0 means perfect equality (everyone has the same income) and 1 means perfect inequality (one person has all the income).
The Lorenz curve
The Lorenz curve plots the cumulative share of income against the cumulative share of the population; the further it bows away from the line of equality, the greater the inequality.
Why it matters for UPSC
The Gini coefficient's 0–1 scale and its link to the Lorenz curve are commonly tested inequality concepts.
Practise related UPSC PYQs
See how this topic has actually been asked. Solve real UPSC Prelims previous year questions with answers and explanations — free.
Practise PYQs →Frequently asked questions
What does a Gini coefficient of 0 mean?
Perfect equality — everyone has the same income.
What is the Lorenz curve?
A graph showing the cumulative share of income against the cumulative share of population, used to derive the Gini coefficient.