Imagine you’re talking to your colleague, who works at the same job at the same company. You both earn the same salary – say, $70,000 per year. In your group of two, the median income is $70,000. The average is $70,000. And the Gini coefficient – a measure of income inequality of a group – is zero, which means that you both are equal: You earn exactly the same amount.
Now imagine Carl Icahn walks into the room. According to Business Insider, Carl earned $7.4 billion in 2013. The median income – the middle value of what is now a group of three – is still $70,000. But the average is over $2.4 billion. And the Gini coefficient is very close to one, the highest value possible. A value of one indicates that a single person has all the money and the others have none.
That’s the idea behind the Gini coefficient, devised in 1912 by Italian sociologist Corrado Gini. In theory, it ranges from zero (perfect equality) to one (complete inequality). In the real world, it ranges from around 0.25-30 in the world’s most equal countries (think Scandinavia) to 0.60-65 in the most unequal ones (South Africa, Namibia and several island nations). Among US states, the range is narrower: from 0.42 (the most equal state, Hawaii) to 0.51 (the most unequal one, Connecticut).
To find the Gini coefficient on the DataUSA site, pick a location from the left menu – a state, county, metropolitan area or other geographical unit – and scroll down to "Income Distribution" in the economy section. For each of the 143,000 locations on the site, you’ll see the population broken into income buckets. Here’s one of the most equal states, South Dakota (which has a Gini of 0.436, well below the national average of 0.485).