What Occupy Wall Street And Gini Coefficient Say About Inequality

By on November 23, 2011 at 9:58 AM

The Occupy Wall Street (OWS) demonstrations that began Sept. 17, 2011, in New York City’s Zuccotti Park in the Wall Street financial district, launched by the Canadian activist group Adbusters have become a worldwide movement. The protests have focused on social and economic inequality, high unemployment, greed, as well as corruption, and the undue influence of corporations-particularly that of the financial services sector-on government. The message is perhaps best summed up with the protesters’ slogan, “We are the 99%,” referring to the growing difference in wealth in the U.S. between the wealthiest 1% and the rest of the population.
One measure of inequality is the Gini coefficient which is a measure of statistical dispersion developed by the Italian statistician and sociologist Corrado Gini and published in his 1912 paper “Variability and Mutability” (Italian: Variabilità e mutabilità).

The Gini coefficient is a measure of the inequality of a distribution, where a value of 0 expresses total equality and a value of 1 maximal inequality. It has found application in the study of inequalities in disciplines as diverse as sociology, economics, health science, ecology, chemistry, engineering and agriculture.


For example, in ecology the Gini coefficient has been used as a measure of biodiversity, where the cumulative proportion of species is plotted against cumulative proportion of individuals.
The Gini coefficent for Income Disparity in the CIA Fact Book of 2009 shown above is where 0 is perfect equality and 100 is perfect inequality (i.e., one person has all the income). Worldwide, Gini coefficients for income range from approximately 0.23 (Sweden) to 0.70 (Namibia) although not every country has been assessed.

While developed European nations and Canada tend to have Gini indices between 0.24 and 0.36, the United States’ and Mexico’s Gini indices are both above 0.40, indicating that the United States (according to the US Census Bureau) and Mexico have greater inequality.

Using the Gini coefficent can help quantify differences in welfare and compensation policies and philosophies. However it should be borne in mind that the Gini coefficient can be misleading when used to make political comparisons between large and small countries. The Gini index for the entire world has been estimated by various parties to be between 0.56 and 0.66.


I created an interactive dashboard of the GINI coefficient and other world country statistics from the CIA Fact Book and used it to identify the top ten highest GINI coefficient countries and the US position as follows on a 100 point scale: Honduras 56.3, Nicaragua 60.3, Colombia 57.10, Brazil 60.70, Bolivia 58.9, Paraguay 57.7, Chile 56.7, Sierra Leone 62.9, Central African Republic 61.3, and South Africa 59.3. The United States at 40.8 is ranked about 40th out of 239 Counties.

The data set and related information are available on my social knowledgebase.

So while the United States has greater inequality (40.8) according to the U.S. Census Bureau than countries such as Canada, France, Spain, and Australia (see map above), it is lower than the world average index (0.60 ) and is not among the top ten countries (62.9-56.3).

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