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3. Gini Coefficient (No Zero Income)

Gini Coefficient (No Zero Income)

The Gini coefficient is most common measure of inequality. It is based on the Lorenz curve, a cumulative frequency curve that compares the distribution of a specific variable (in this case, income) with the uniform distribution that represents equality. The Gini coefficient is bounded by 0 (indicating perfect equality of income) and 1, which means complete inequality. This calculation does not includes observations of 0 income.