Gini Coefficient Calculator — Formula
## How to Calculate the Gini Coefficient
### Formula
**Gini = Sum of all |xi - xj| / (2 * n^2 * mean)**
The Gini coefficient sums all pairwise absolute differences and normalizes. A value of 0 means perfect equality (everyone has the same). A value approaching 1 means extreme inequality (one person has everything). It is the most widely used measure of income inequality.
### Formula
**Gini = Sum of all |xi - xj| / (2 * n^2 * mean)**
The Gini coefficient sums all pairwise absolute differences and normalizes. A value of 0 means perfect equality (everyone has the same). A value approaching 1 means extreme inequality (one person has everything). It is the most widely used measure of income inequality.
Exemplo Resolvido
Five incomes: 10, 20, 30, 40, 100.
- Mean = (10+20+30+40+100)/5 = 200/5 = 40
- Sum of all 25 pairwise |xi - xj| = 440
- Gini = 440 / (2 * 25 * 40) = 440 / 2000 = 0.22
- This indicates moderate inequality