1. Inequalities of Development Lorenz Curve and Gini Coefficient
WJEC A2 Geography
Module GG4 (Option C)

2. How evenly spread is the world’s wealth?
Cumulative World Pop'
Cumulative Wealth (PPP)
1988
1993 10
0.9
0.8 20
2.3 2 50
9.6
8.5 75
25.9
22.3 85 41
37.1 90
53.1
49.2 95
69.8
66.3 99
91.7
91.5
100

3. World distribution of wealth (PPP) Lorenz Curve
100 90 80 70 60 50 40 30 20 10
Pop’
Wealth
(PPP)
1988
1993 10
0.9
0.8 20
2.3 2 50
9.6
8.5 75
25.9
22.3 85 41
37.1 90
53.1
49.2 95
69.8
66.3 99
91.7
91.5
100
Line of total integration
Cumulative Wealth (PPP) 10 20 30 40 50 60 70 80 90
100
Cumulative Global Population

4. World distribution of wealth (PPP) Lorenz Curve
100 90 80 70 60 50 40 30 20 10
Pop’
Wealth
(PPP)
1988
1993 10
0.9
0.8 20
2.3 2 50
9.6
8.5 75
25.9
22.3 85 41
37.1 90
53.1
49.2 95
69.8
66.3 99
91.7
91.5
100
The richest 10% possessed 46.9% of the world wealth in 1988.
Line of total integration
Cumulative Wealth (PPP) 10 20 30 40 50 60 70 80 90
100
Cumulative Global Population

5. World distribution of wealth (PPP) Lorenz Curve
100 90 80 70 60 50 40 30 20 10
Pop’
Wealth
(PPP)
1988
1993 10
0.9
0.8 20
2.3 2 50
9.6
8.5 75
25.9
22.3 85 41
37.1 90
53.1
49.2 95
69.8
66.3 99
91.7
91.5
100
The richest 10% possessed 50.8% of the world wealth in 1993.
Line of total integration
Cumulative Wealth (PPP) 10 20 30 40 50 60 70 80 90
100
Cumulative Global Population

6. World distribution of wealth (PPP) Lorenz Curve
100 90 80 70 60 50 40 30 20 10
Pop’
Wealth
(PPP)
1988
1993 10
0.9
0.8 20
2.3 2 50
9.6
8.5 75
25.9
22.3 85 41
37.1 90
53.1
49.2 95
69.8
66.3 99
91.7
91.5
100
Line of total integration
Cumulative Wealth (PPP)
The greater this area the more unequal the distribution 10 20 30 40 50 60 70 80 90
100
Cumulative Global Population

7. What is a Gini Coefficient?
The Gini coefficient, invented by the Italian statistitian Corado Gini, is a number between zero and one that measures the degree of inequality in the distribution of something.
The coefficient would register zero (0.0 = minimum inequality) for a society in which each member received exactly the same amount.
A coefficient of one (1.0 = maximum inequality) would mean one member got everything and the rest got nothing.

8. Calculating the Gini Coefficient
100 90 80 70 60 50 40 30 20 10
Although the Lorenz Curve is good visual indicator of distribution equality, the Gini Coefficient provides a clearer quantatitive value.
A / B = Gini
Values should lie between 0 (total integration) to 1 (total segregation). B
Line of total integration
Cumulative Wealth (PPP) A 10 20 30 40 50 60 70 80 90
Cumulative Global Population

9. Tasks Plot Lorenz Curves for 1988 and 1993 data on graph paper. Answer
Calculate the Gini Coefficient for both. What do these tell you about trends in world distribution of wealth between 1988 and 1993? Answer
Economist’s estimate that the world's Gini coefficient fell to 0.63 in 1998 from 0.66 in Plot a graph to show fluctuations over time. Answer
Pop’
Wealth
(PPP)
1988
1993 10
0.9
0.8 20
2.3 2 50
9.6
8.5 75
25.9
22.3 85 41
37.1 90
53.1
49.2 95
69.8
66.3 99
91.7
91.5
100

10. What are typical Gini Coefficients for countries around the world?
In practice, coefficient values range from around 0.2 for historically equalitarian countries like Bulgaria, Hungary, the Slovak and Czech republics and Poland to over 0.6 for Central and South American countries (such as Brazil) where powerful elites dominate the economy.
The evolution of the Gini coefficient is particularly useful as it reveals trends. It shows the evolution towards greater equality in Cuba from 1953 to 1986 (0.55 to 0.22) and the growth of inequality in the USA in the last three decades during which the Gini went from 0.35 in the '70's to 0.40 now (and it is still rising!).
Most European countries and Canada rate around 0.30, Japan and some Asian countries get around 0.35, some reach 0.40 while most African countries exceed 0.45.
Source:

11. In 1993 the Gini of the whole world was 0.66 In 1988 it was 0.63
BACK

12. In 1993 the Gini of the whole world was 0.66
In 1988 it was The early 1990’s saw a worrying increase in Global inequalities of wealth. However, some experts say that things are improving.
BACK

13. World distribution of wealth (PPP) Lorenz Curve
100 90 80 70 60 50 40 30 20 10
Pop’
Wealth
(PPP)
1988
1993 10
0.9
0.8 20
2.3 2 50
9.6
8.5 75
25.9
22.3 85 41
37.1 90
53.1
49.2 95
69.8
66.3 99
91.7
91.5
100
Line of total integration
Cumulative Wealth (PPP)
BACK 10 20 30 40 50 60 70 80 90
100
Cumulative Global Population

14. The fraction of the world's population below the poverty line (defined as an income of $2 a day) fell to 19% in 1998 from 41% in 1970 (chart).
Overall inequality has decreased as well. the world's Gini coefficient fell to 0.63 in 1998 from 0.66 in 1970.
However, there have been fluctuations such as that seen in the early 1990’s.
BACK

15. A Fairer Future for the World?
Global trends for the Gini coefficient of wealth can be rather confusing and distorted by the rapid growth of large Tiger Economies like China.
“The gap between the worlds’s rich and poor has never been wider. Malnutrition, AIDS, conflict and illiteracy are a daily reality for millions.” MakePovertyHistory.ORG