How to Calculate Gini Coefficient in R

In this article, we will discuss what is Gini Coefficient and How to Calculate Gini Coefficient in R Programming Language.

What is the Gini Coefficient?

The Gini coefficient is a way to measure the income distribution of a population. The value for the Gini coefficient ranges from 0 to 1 where higher values represent greater income inequality.

0 represents perfect income equality meaning everyone has the same income

1 represents perfect income inequality meaning one individual has all the income

How to Calculate Gini Coefficient in R

We can calculate the Gini coefficient using the Gini() function from the DescTools package.

Calculate Gini Coefficient Using Individual Incomes

Step 1: Package Installation

install.packages("DescTools")
library(DescTools)

Step 2: Defining vector of incomes

x <- c(50, 50, 70, 70, 70, 90, 150, 150, 150, 150)

Step 3: Calculate Gini coefficient

Gini(x, unbiased=FALSE)

R

#Step 1: Package Installation
install.packages("DescTools")
library(DescTools)

#Step 2: Defining vector of incomes
x <- c(50, 50, 70, 70, 70, 90, 150, 150, 150, 150)

#Step 3: Calculate Gini coefficient
Gini(x, unbiased=FALSE)

Output:

0.226

Calculate Gini Coefficient Using Frequencies

R

#Step 1: Package Installation
install.packages("DescTools")
library(DescTools)

#Step 2: Define vector of incomes
x <- c(10, 20, 25, 55, 70, 90, 110, 115, 130)

#Step 3: Define vector of frequencies
n <- c(6, 7, 7, 14, 22, 20, 8, 4, 1)

#Step 4: Calculate Gini coefficient
Gini(x, n, unbiased=FALSE)

Output:

0.2632289

Conclusion

In this article, we learnt about How to Calculate Gini Coefficient in R. The value for the Gini coefficient ranges from 0 to 1 where higher values represent greater income inequality.