Basics Blog
SHADAC has created a series of “Basics Blogs” to familiarize readers with common terms, concepts, and topics that are frequently covered. See all Basics Blogs here.
SHADAC’s State Health Compare tool allows users to download and view data sets of health measures on health care costs, access, affordability, and more. One such available measure allows users to explore ‘Income Inequality’ in the U.S. by examining the Gini Coefficient state by state.
What is the Gini Coefficient? With values between 0 and 1, the Gini Coefficient is a measure of inequality, often used to measure income inequality, specifically. In this post, SHADAC experts will break down the Gini Coefficient definition, its history, and how it is used by researchers, policymakers, and analysts today.
Gini Coefficient Definition and History
According to Our World in Data, a collaborative effort between researchers at the University of Oxford and Global Change Data Lab, “The Gini Coefficient, or Gini Index, is the most commonly used measure of inequality.” Developed by, and named after, statistician Corrado Gini in the early 1900s, the Gini Coefficient is often used to measure wealth and/or income inequality. However, it can actually be used to measure inequality of any type, including health care access, life expectancy, and more.
Specifically, the Gini Coefficient is a value that ranges between 0 and 1 – a higher Gini Coefficient value indicates more inequality (0 indicates perfect equality and 1 indicates perfect inequality). As described in a report discussing income inequality measures in the ACS from the Housing and Household Economic Statistics Division of the U.S. Census Bureau in 2006, “The Gini coefficient is a ratio with a value between zero and one, with zero indicating equality among all income recipients and one indicating one person has all the income and everyone else has no income.”
Other Options for Measuring Inequality
While the Gini Coefficient is considered to be one of the most oft-used measures of inequality, particularly income inequality, there are other measures that could be considered. Some other methods used for measuring inequality include:
- Mean Logarithmic Deviation of Income
- Theil Index
- Atkinson Index
- Hoover Index
You can learn more about some of these different inequality measures, along with how they are calculated, in the 2006 Household Income Inequality Measures Report from the Housing and Household Economic Statistics Division of the U.S. Census Bureau.
What Is the Difference Between Gini Coefficient and Gini Index?
Now we know that the Gini Coefficient is a measure of inequality, often income inequality, with values ranging from zero to one. The higher the Gini Coefficient, the more inequality there is between income recipients; the lower the Gini Coefficient, the more equality there is between income recipients.
So, what is the Gini Index, then? The Gini Index is simply the Gini Coefficient expressed as a percentage between 0% to 100%. For example, the Gini Coefficient of the United States in 2023 was 0.48; the Gini Index, then, would be 48%.
How Does SHADAC Use the Gini Coefficient?
On our State Health Compare tool, we have an ‘Income Inequality’ measure that uses Gini Coefficient data produced by the U.S. Census Bureau based off income data from the American Community Survey (ACS).
This measure allows users to see disparities in income equality between states, compare state values to the national Gini Coefficient value, and see changes & trends in income inequality over time. This measure on State Health Compare has data available for the years 2006 through 2023.
Evidence shows that individuals with low incomes have overall increased risk for mental illness, chronic diseases (like diabetes, cardiovascular disease, etc.), and cancer along with higher mortality rates and lower life expectancies.
It’s not just low incomes that are associated with impacts on health. There is also evidence that income inequality itself is linked to “damaging health and social consequences” (Pickett et al 2015). There are studies suggesting income inequality is associated with poorer mental health, disparities in life expectancy, and higher rates of interpersonal violence and mental illness.
Understanding how states experience different levels of income inequality can help researchers, analysts, and others identify state populations experiencing high rates of income inequality and, in turn, target interventions and programs to help close income gaps and improve inequality-related adverse health outcomes.
Gini Coefficients by State Before and During the Pandemic
Let’s take a look at how State Health Compare can help you explore this information with accessible visualizations and easy-to-download data.
In 2019, five states (California, Louisiana, Mississippi, New York, and Connecticut) and DC were ranked as having the highest Gini Coefficients in the nation ranging between 0.49 and 0.51.
Figure 1. Income Inequality (Gini Coefficient) by State, 2019
Access map and data directly on State Health Compare.
The next year with available data (2021) saw this number increase to a total of nine states and DC with a Gini Coefficient range between 0.49 and 0.53. This includes states that remained within the same category (California, for example, remaining at 0.49 from 2019 to 2021), and states that saw increases in their Gini value (West Virginia, for example, had a coefficient of 0.46 in 2019, increasing to 0.49 in 2021).
Figure 2. Income Inequality (Gini Coefficient) by State, 2021
Access map and data directly on State Health Compare.
This could perhaps reflect changes to income distribution that occurred as a result of the pandemic. Research suggests that the global Gini Coefficient increased (i.e., inequality increased) by over 0.5 just between 2019 and 2020, and this was after seeing drops of about 0.5 every year between 2003 and 2013.
Other evidence posits that those at the top of wealth distribution actually increased their wealth, with one Forbes article suggesting, “U.S. billionaires have gotten about $1.2 trillion richer during the pandemic.” Simultaneously, one report based on World Bank data suggests that “99% of the world lost income and more than 160 million people were pushed into poverty during the pandemic.”
Those at the top of the income distribution may have seen increases in wealth while many at lower income levels actually lost income, which could have led to increased income inequality in some states (and globally).
Explore More Health-Related Measures on State Health Compare
Income inequality is just one of several factors that can impact health in both the short and long term – the Gini Coefficient is among over 45 other health and health-related measures on State Health Compare.
Continue to explore customized data sets and create data visualizations like charts, graphs, tables, and more using State Health Compare here.