Gini index of income inequality, explained

What it measures

The Gini index is a summary measure of income inequality. It ranges from 0 (perfect equality, every household has the same income) to 1 (perfect inequality, one household has all the income, everyone else has none). In practice, US places fall between about 0.35 and 0.60. A Gini of 0.40 means the income distribution is moderately unequal; 0.50 is high; 0.55+ is among the most unequal places in the developed world.

The Gini index is derived from the Lorenz curve, which plots the cumulative share of income held by the cumulative share of households (ordered from poorest to richest). The Gini is the ratio of the area between the Lorenz curve and the line of perfect equality to the entire area under the line of perfect equality.

Why it matters

Gini is the standard summary measure of inequality used in economic policy and academic research. Local-area Gini values predict a range of downstream outcomes: communities with high Gini tend to have higher crime rates, lower social mobility, higher rates of mental-health distress, and more politically polarized voting patterns. Place-level Gini also reveals the structure of local economies, a metro with high Gini has both very high and very low earners present in significant numbers, while a low-Gini metro is more economically homogeneous.

How the Census measures it

ACS Table B19083, Gini Index of Income Inequality. The Census Bureau calculates the Gini for each geography using household income data from the ACS sample. The single published value is the Gini for all households in the place; it is dimensionless and ranges 0 to 1.

How to read the numbers

The US national Gini is about 0.48. State Ginis range from about 0.43 (Utah, Alaska, New Hampshire) to about 0.52 (New York, Connecticut, California, Louisiana). Among large metros, the highest Gini values appear in metros with extreme top-end wealth alongside large low-income populations (New York, Miami, Los Angeles, San Francisco, New Orleans). The lowest values are in mid-sized, economically homogeneous Midwest and Mountain West metros. A metro Gini above 0.50 indicates substantial top-end concentration; a Gini above 0.55 places the metro among the most unequal large urban areas in the US.

Caveats and limitations

The Gini index is a single summary statistic and can be the same for distributions with very different shapes, a metro with concentrated top-end wealth and a metro with a hollowed-out middle class can produce identical Gini values. For richer inequality analysis, use the Gini alongside the income-quintile shares or the ratio of the 90th-percentile income to the 10th-percentile income. The metric also measures only household money income; it does not account for taxes, transfers, or in-kind benefits that materially reduce post-tax-and-transfer inequality.