Question

calculate the Gini Index of the following income distribution of 10 people:

10,10,10,10,10,10,10,10,50,100

Answer 1

Calculation of ginni coefficient:

Steps:

1. Assign Frequency(ni) to Income (Xi)

2. Calculate Cumulative Frequency (C.F)

3. Assigning Ratio of percentage to total o.1 = 10% of Income, 0.2 = 20% of Income and so on..

4. Calculate 0.043478/1=0.056522, 0.86957/1=0.113043 and so on...

5.Deduct qi from pi

6.Ginni Coefficient = Sum of Bold Block of 9th column/ Sum of Bold Block of 5th Column

S.No	Income(Xi)	(Frequency)ni	C.F (Ni)	Fi = Pi	Xi * ni	C.F of Xi * ni	qi	pi-qi
1	10	1	1	0.1	10	10	0.043478	0.056522
2	10	1	2	0.2	10	20	0.086957	0.113043
3	10	1	3	0.3	10	30	0.130435	0.169565
4	10	1	4	0.4	10	40	0.173913	0.226087
5	10	1	5	0.5	10	50	0.217391	0.282609
6	10	1	6	0.6	10	60	0.26087	0.33913
7	10	1	7	0.7	10	70	0.304348	0.395652
8	10	1	8	0.8	10	80	0.347826	0.452174
9	50	1	9	0.9	50	130	0.565217	0.334783
10	100	1	10	1	100	230	1	1
		10			230
					Ginni Index	0.52657