How do we measure inequality in countries in a way that South Africa is higher than the US or India?
In: Economics
One way that economists measure wealth inequality is through the [Gini coefficient](https://en.wikipedia.org/wiki/Gini_coefficient?wprov=sfti1). The higher that number is, the greater the wealth inequality.
There’s a lot of math involved, but a simple case assumes that there’re just two levels of income: low and high. If H represents the percentage of the population made up by high-income people and those people earn M percent of the total income, the Gini coefficient is M – H. As an example, it’s often told that 1% of the world’s population has 50% of the wealth. So, the Gini coefficient for the world would be 50% – 1% = 49% in this case. When there’re more than two income levels things get a lot tricker, but hopefully that gives you some idea of how it works.
[Here](https://en.wikipedia.org/wiki/List_of_countries_by_income_equality?wprov=sfti1)’s a list of countries with their Gini coefficients. You can see that South Africa’s is 63% and the United States is at 41%. So, the United States seems to have less wealth inequality than South Africa.
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