Gini coefficient
I propose the topic on gini coefficient to be discussed in class having learned about inequalities, it will be interesting and easy to understand Gini coefficient which is a method of calculating inequalities that exist in the society. Gini method is commonly used to determine inequalities although there are other methods like atkison index or palma ratio.
I decided to choose this topic because discussing it in class will make it easier to understand the calculations of the Gini coefficient better. Gini coefficient can be determined by illustrating the data and analyzing the implications of the data on a triangle thee calculate the coefficient. Gini coefficient can be used to compare the inequality that exists in different countries or societies. When analyzing the data in a triangle, the horizontal axis usually represents everyone in the society from the left side to the right side considering the level of wealth the poorest are located on the left side while the richest go to the right side. The points on the Lorenz curve represent how much wealth everyone makes to the left from the point. Calculating the Gini coefficient needs you to calculate the percentage area which lies under the line with 45 degrees and also above the lorez curve. (Schiller, 1972).
After plotting the data, and drawing of the triangle, the area of the triangle under the Lorenz curve is calculated to get the Gini coefficient, and then compare the results. The country data with a higher coefficient implicates more wealth in the country. If the Gini income coefficient is equal to one, then it means that the entire income in the population being analyzed is earned by one person. This implies inequality in the population. If the Gini income coefficient is equals to zero, then it means that the wealth in the population getting analyzed is evenly distributed and owned by everyone in the population equally. (Schiller, 1972).
The discussion of Gini coefficient will be much fun to discuss in class because it involves various practice problems which can get solved in class. Solving the problems in class will help to determine statistical measures of wealth distribution for various countries thus measure the various inequalities, income distribution and the distribution of wealth among populations which is less common.
References
Schiller, B. R. (1972). Economics of poverty and discrimination.