What Is the Gini Coefficient? 2025 Guide

Key Takeaways

• The Gini coefficient is just a number from 0 to 1 that shows how unequal a country (or anything else) is.
• In 2025, the world’s average income Gini is around 0.38, but wealth and climate inequality are much worse.
• It’s a useful tool, but it has blind spots — you’ll learn exactly what those are and what to look at instead.

Imagine you and your friends put all your money in one big pile and then split it. If everyone walks away with the same amount, that’s perfect equality. If one friend grabs everything while the rest get nothing, that’s perfect inequality. The Gini coefficient is simply the quickest way the world measures how far we are from that fair split. It’s been around since 1912, yet it still pops up in every news story about rich vs poor. Let’s break it down like we’re chatting over coffee.

What Is the Gini Coefficient Exactly?

Think of it as an inequality score.

• 0 = everyone has exactly the same
• 1 = one person has everything, everyone else has zero
• Most countries sit between 0.25 and 0.60

The man behind it was an Italian statistician named Corrado Gini back in 1912. At first he used it to study populations, but today we mostly see three types:

• Income Gini (what people earn)
• Wealth Gini (what people own — houses, stocks, savings)
• Consumption Gini (what people actually spend — used a lot in poorer countries)

Quick example: In 2025, Norway’s income Gini is about 0.27 (pretty equal), but its wealth Gini is closer to 0.60 once you count billionaires’ yachts and investments.

How the Gini Coefficient Is Calculated

Don’t worry — you don’t need a PhD to get the idea.

1. Draw the “Lorenz curve” — basically a graph that shows what percentage of total income the poorest 10%, 20%, etc., actually get.
2. If the curve is a perfect straight line, everyone has the same (Gini = 0).
3. The bigger the empty space under the line, the worse the inequality.
4. The formula is just that empty space divided by the whole triangle underneath.

Want to play with it yourself?

• Free Excel template from World Bank (link in description)
• One-line Python code: just install the “inequality” package and type two commands
• Google Sheets add-ons updated for 2025 data

Gini Coefficient by Country: 2025 Rankings

Here are the latest numbers people are talking about this year:

Most unequal (highest Gini)

• South Africa ≈ 0.63
• Namibia ≈ 0.58
• Suriname ≈ 0.55
• Zambia ≈ 0.54

Most equal (lowest Gini)

• Slovakia 0.217
• Slovenia 0.238
• Czech Republic 0.249
• Norway 0.270

Surprises in 2025

• China dropped below 0.46 thanks to rural programs
• India’s official number looks good at 0.33, but many experts say the real figure is closer to 0.50 when you include hidden wealth
• USA sits at 0.47 — higher than most rich countries

Historical Trends: 1990–2025

Back in 1990 the world average income Gini was about 0.44. It fell nicely until 2008, then the financial crisis pushed it up again. The pandemic made it jump, but 2023–2025 shows a small drop to around 0.38. Wealth Gini, though? Still stuck near 0.65 globally because billionaires keep getting richer faster than everyone else.

Limitations of the Gini Coefficient

Here’s the part most articles skip — Gini isn’t perfect.

• It doesn’t tell you if people are actually poor, only how spread out the money is. A country where everyone earns $50,000 has Gini of 0. A country where half earn $1 and half earn $1 million also has low Gini. Same score, totally different lives.
• It barely notices when the middle class gets squeezed.
• In many developing countries the data is old or incomplete.

That’s why smart researchers now look at the Palma Ratio (how much the top 10% have compared to the bottom 40%) or the Theil index when they want the full picture.

Emerging Uses of Gini in 2025

This is the fun part — people are using Gini for brand-new things:

• Climate Gini: Rich countries and rich people cause most emissions, poor ones suffer most. Carbon Gini is around 0.70 — worse than money!
• Gender pay gap Gini in companies (some tech giants publish theirs now)
• Health Gini: how fairly years of healthy life are shared
• Even machine learning: “Gini impurity” helps computers decide the best questions to ask

How Governments Reduce Gini Scores

Brazil did something amazing. Their Bolsa Família cash-transfer program cut the Gini from 0.59 in 2001 to below 0.50 in ten years — one of the fastest drops ever. Nordic countries keep theirs low with high taxes on the rich and free education/healthcare for everyone.

Want to lower your own country’s number? Three things almost always work:

• Tax the super-rich more fairly
• Give direct cash help to the poorest families
• Free or cheap college and healthcare

Practical Tips: Understand Any Gini Number Fast

Next time you see a headline screaming about inequality, ask yourself these four quick questions:

• Is it income, wealth, or consumption Gini? (They tell different stories)
• Is it before tax or after tax and benefits? (After-tax is the one that really matters)
• How old is the data? (Some countries still use 2019 numbers)
• What’s the Palma Ratio or top 10% share? (Gives the missing details)

Rule of thumb people use in 2025:

• Below 0.30 → very equal (mostly Northern Europe)
• 0.30–0.40 → normal for rich countries after taxes
• Above 0.40 → watch out, social tension often rises

Conclusion

The Gini coefficient is like a thermometer for fairness in a society. It’s super useful, but never rely on temperature alone to know if someone is sick. Always check absolute poverty levels and how the top 1% are doing too.

Next time someone throws a Gini number at you in a debate, you’ll know exactly what it means — and what it doesn’t. Share this guide with a friend who keeps asking, “but what does that number actually tell us?” — they’ll thank you!