Which coefficient is commonly used to measure income or wealth inequality within a country?

The coefficient commonly used to measure income or wealth inequality within a country is the Gini coefficient.

Developed by Italian statistician Corrado Gini, the measure compares an observed distribution with perfect equality. It is closely associated with the Lorenz curve, which plots the cumulative share of income or wealth received by successive portions of a population.

A Gini coefficient of 0 represents perfect equality, while 1 represents theoretical maximum inequality when measuring nonnegative incomes or wealth. Results are also commonly expressed as percentages from 0 to 100. Higher values indicate greater inequality, but the coefficient does not show which groups benefit or lose.

The Gini is not the only inequality measure. The Palma ratio compares the income share of the richest group with that of the poorest, and the Theil index can be decomposed across regions or population groups. Two countries can share a Gini value while having very different distributions.