The Gini coefficient measures income or wealth inequality on a scale from 0 for perfect equality to 1 for perfect inequality.
A coefficient of 0 means every person or household has the same measured income or wealth. A coefficient of 1 represents the theoretical extreme in which one person holds everything and everyone else holds nothing. Some statistical publications multiply the coefficient by 100 and report a Gini index instead.
The measure is derived from the Lorenz curve, which plots the cumulative share of income received by cumulative shares of the population. The Gini coefficient is related to the area between the Lorenz curve and the line representing perfect equality.
The Gini coefficient does not identify why inequality exists or show how income is distributed at particular points. Two countries can have the same coefficient but different middle-class and poorest-group outcomes. Results also depend on whether data measure market income, disposable income, households, or individuals.