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China and the Ginni coefficient



In discussing China, Paul Simon mentioned the Ginni Co-efficient. Several WAISers asked what that meant, so I asked him. He replied: "The Ginni Co-efficient, as I understand it, is a measure of social stability based on equality and income distribution. A coefficient of 0 means everyone is exactly equal with NOTHING. A coefficient of ONE means one person in a country has EVERYTHING. Maoist China was, of course, a nation with a spectacularly low Ginni coefficient. I understand that coefficients of .4 and above indicate a very inequitable distribution of wealth and that the sociological theory is that this makes the society unstable. I'm neither a sociologist nor a statistician. I don't know what numbers get crunched to reach the coefficient nor what the historic or socio-economic basis of the theory is. However, news articles in non-tabloids often use the number, as does The Economist. From lay observation, I'd say the high coefficients are probably more dangerous in developing nations. EG: If you earn $100 a year as the average citizen and your wealthiest countrymen sopped up most of the wealth and earned 40 million each, you'd probably be more upset than you would be if you saw Bill Gates, Warren Buffet, Jack Welch, etc taking in 40 billion apiece but you were getting a cool million yourself........"

My comment: Who was Ginni? Some wop, as Nixon would say? I consulted Google, which cam up with lots of entries, beginning: "Did you mean: Ginni coefficient? [Yes, Paul did. I thought his hyphen was superfluous. RH].
.. poverty measure P increases with greater inequity of income below the poverty line, as measured by the Ginni co-efficient. Thus, the measure P is a function of ...

If you want to know more, Google will lead you, but it does not say who Ginni was.

Ronald Hilton - 1/5/02


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