The Gini Index is a tool for measuring the inequality of income distribution. This index defines the level of income inequality in a population by measuring the area between the line of perfect equality and the Lorenz curve. It is expressed as a percentage and can range from 0 (perfect equality) to 100 (total inequality). A Gini Index of 0 implies total equality, whereas a Gini Index of 100 implies total inequality, which means all income goes to one person’s pocket.

The Gini Index became a popular way of measuring inequality after its publication by Italian statistician Corrado Gini in 1912. Gini used the index as a way to measure income and wealth inequality among countries and to track changes in income distribution over time.

The Gini Index is widely used to assess poverty and inequality, especially in developing countries. It is not only a measure of income inequality but also provides an overall picture of the country’s social wellbeing. For this reason, the World Bank and other global economic institutions use the Gini Index to measure inequality between countries and compare poverty levels.

The Gini Index is also the most commonly used measure of income inequality in the world. In 2018, the latest available data, the United Nation’s Gini index was 41.3. This reflects a global increase in inequality since the start of the decade, with inequality continuing to rise during the COVID-19 pandemic as well.

Although the Gini Index can be used as an effective measure of inequality, due to its ability to compare income distributions across countries, it has some limitations. For example, with certain distributional patterns, the Gini index may overstate the amount of inequality present in a population. It also does not account for important socio-economic factors, such as access to education, health, infrastructure and other services, that may explain the levels of income and inequality in a population.

The Gini Index can be used to measure the distribution of income across a population and gain insight into the level of social inequality in a country. However, it is important to consider other measures as well, such as levels of access to services and socio-economic outcomes, when assessing the full extent of poverty and inequality in a population.