DEFINITION of 'Gini Index'
A measurement of the income distribution of a country's residents. This number, which ranges between 0 and 1 and is based on residents' net income, helps define the gap between the rich and the poor, with 0 representing perfect equality and 1 representing perfect inequality.
INVESTOPEDIA EXPLAINS 'Gini Index'
The index is named after its developer, Corrado Gini, an Italian statistician of the early 20th century. It is typically expressed as a percentage, so a 20 coefficient would be shown as 20%.
Don't mistake the measurement of income distribution with the measurement of wealth. A wealthy country and a poor country can have the same Gini coefficient, even if the wealthy country has a relatively equal distribution of affluent residents and the poor country has a relatively equal distribution of cashstrapped residents.
The Gini index is only as accurate as the gross domestic product (GDP) and income data that a country produces. Many developing nations do not produce accurate or trusted economic data, so the index becomes more of an estimate. There is also a generally negative correlation between Gini coefficients and percapita GDP, because poorer nations tend to have higher index figures.

8020 Rule
A rule of thumb that states that 80% of outcomes can be attributed ... 
Upper Class
A socioeconomic term used to describe individuals who reside ... 
Continuously Offered LongerTerm ...
A type of bond that's been sold by the World Bank since 1989 ... 
Net Worth
The amount by which assets exceed liabilities. Net worth is a ... 
Net Income  NI
1. A company's total earnings (or profit). Net income is calculated ... 
Gross Domestic Product  GDP
The monetary value of all the finished goods and services produced ...

Fundamental Analysis
A Guide To Global Investment Performance Standards
Is your investment management firm GIPS compliant? Learn more here. 
Mutual Funds & ETFs
How Mutual Funds Differ Around The World
Learn which country has the strictest rules on mutual fund construction and why. 
Fundamental Analysis
An Evaluation Of Emerging Markets
Get the full story on this asset class before you write it off as too risky. 
Economics
Cashing In On Macroeconomic Trends
Learn to identify the things that may impact your investments down the road. 
Economics
What's the relationship between r squared and beta?
Learn about the relationship between Rsquared and Beta. Explore how the concepts are related and often used in conjunction with portfolio Alpha. 
Economics
What are some limitations of the consumer price index (CPI)?
Explore some of the basic limitations of the widely used economic indicator, the consumer price index, or CPI, and examine the criticism of its accuracy. 
Economics
Is the consumer price index (CPI) a cost of living index?
Explore the consumer price index (CPI) and understand why it is not an actual cost of living index although it is often identified as one. 
Economics
Where do funds report their rsquared?
Learn where to find Rsquared calculations for mutual funds. Explore Rsquared, Alpha and Beta and how these calculations measure securities' performance. 
Fundamental Analysis
How do you calculate rsquared in Excel?
Calculate Rsquared in Microsoft Excel by creating two data ranges to correlate. Use the Correlate formula to correlate both sets of data, or x and y. 
Fundamental Analysis
What are the most common issues with Serial Correlation in stocks?
Read about the concept of serial correlation in stock returns, and learn why market analysts are divided about the efficacy of trading based on stock patterns.