Income-based Gini obtained from CEPAL

Variable Definition

The Gini Index is a widely used summary measure of economic inequality that describes the distribution of wealth or income in a population. The final index calculated ranges from 0 to 1 with 0 expressing perfect equality and 1 expressing perfect inequality. Some features of the Gini Index as a measure of inequality are: 1)Population independence: The Gini Index does not depend on the size of the population. However, age structure and population mobility may play a role (people generally have low income when they are younger vs. when they are older); 2) Scale independence: The Gini Index does not depend on the size of the economy. However, it is important to keep in mind that small populations or less diverse economies tend to have small Gini Indices; 3) Transfer principle: if income is transferred from a rich person to a poor person the resulting distribution is more equal. The Gini index was calculated based on per capita household income deciles using disaggregated data on monetary income from salaries, rents, capital, transfers, and other from country household surveys. Data were harmonized across surveys to ensure internal consistency and for comparison between countries and cities, including adjusting per capita incomes for purchasing power parity using 2005 as the reference year and the consumer price index of a given survey year. The primary estimates were completed by the Division of Social Development of CEPAL and verified by the Global Urban Observatory of the UN Habitat.