Question

Table 1: Distribution of income

Country	Gini, %	Year
Argentina	48.3	2006
Australia	35.2	1994
Belgium	33.0	2000
El Salvador	52.4	2002
European Union	31.6	2003
Finland	26.9	2000
France	26.7	2002
Germany	28.3	2000
India	36.8	2004
Japan	38.1	2002
Morocco	40.0	2005
Nigeria	43.7	2003
Russia	40.5	2005
United Kingdom	36.0	1999
United States	45.0	2004
Yemen	33.4	1998

Source: CIA World Factbook

Which country is the most equal and least equal in terms of income distribution?

Using two countries from Table 1, discuss whether a wealthy (wealth as measured by per capita GDP) society is more equal than a less wealthy society.

Answer 1

Q1.

Gini coefficient measures the distribution of income/wealth of an economy. The higher the Gini coefficient, the higher are the income inequalities in the economy. i.e., If the Gini coefficient is higher for an economy, more inequalities exist in the economy and the society is less equal in nature.

Among the given nations, the Gini coefficient is the highest for El Salvador. Therefore, El Salvador is the least equal nation among the given nations. The Gini coefficient is the least for France. Therefore, France is the most equal nation among the given nations

Q2.

Let us compare two nations: The USA and India

The per capita GDP of the USA is many times higher compared to the per capita GDP of India. However, it is observed that the Gini coefficient of the USA is higher than that of India. The income inequalities are higher in the USA compared to India. Therefore, it can be concluded that the statement wealthy society is a more equal society than a less wealthy society is not always true. The inequalities might be more pronounced in both wealthy as well as less wealthy societies based on the conditions of the respective societies.