Economics

NITI AYOG Index show some improvement in SDG on inequity.

Lorenz Curve and Gini Coefficient

·        The distribution of financial gain in an economy is represented by the lorenz Curve andthe degree of financial gain inequality is measured through the Gini coefficient.

·        One of the 5 major and common macroeconomic goals of a government is theequitable (fair) distribution of financial gain.

·        The lorenz Curve (the actual distribution of financial gain curve), a graphical distributionof wealth developed by max Lorenzin 1906, shows the proportion of income earnedby any given percentage of the population.

·        The line at the 45º angle shows perfectly equal financial gain distribution, whereas the otherline shows the actual distribution of financial gain. The additional faraway from the diagonal, themore unequal the size of the distribution of financial gain.

Gini Coefficient

·        The Gini constant, that is derived from the lorenz Curve, is used as anindicator of economic development during a country.

·        The Gini coefficient measures the degree of financial gain equality during a population.

·        The Gini coefficient will vary from zero (perfect equality) to one (perfect inequality).

·        A Gini coefficient of zero means that everybody has a similar financial gain, whereas aCoefficient of one represents one individual receiving all the financial gain.