Which index measures income inequality within a society, with 0 for perfect equality and 1 for maximum inequality?

Which index measures income inequality within a society, with 0 for perfect equality and 1 for maximum inequality?

• A. Gini Coefficient
• B. HDI
• C. MPI
• D. Big Mac Index

Answer: (A)

Measuring how income is spread across a society is about inequality. The Gini Coefficient captures this by looking at how evenly income is distributed among all residents. It produces a number between 0 and 1: 0 means everyone has exactly the same income, full equality; 1 means all income goes to a single person, extreme inequality. In practice, real countries fall somewhere in between, and the Gini can be tracked over time or compared across nations. The other indices measure different things. The Human Development Index combines life expectancy, education, and per-capita income to rate overall development, not how income is shared. The Multidimensional Poverty Index looks at multiple deprivations people face (like health, education, living standards) to describe poverty, not inequality of income. The Big Mac Index compares price levels to gauge purchasing power parity; it isn’t about how income is distributed either.

Measuring how income is spread across a society is about inequality. The Gini Coefficient captures this by looking at how evenly income is distributed among all residents. It produces a number between 0 and 1: 0 means everyone has exactly the same income, full equality; 1 means all income goes to a single person, extreme inequality. In practice, real countries fall somewhere in between, and the Gini can be tracked over time or compared across nations.

The other indices measure different things. The Human Development Index combines life expectancy, education, and per-capita income to rate overall development, not how income is shared. The Multidimensional Poverty Index looks at multiple deprivations people face (like health, education, living standards) to describe poverty, not inequality of income. The Big Mac Index compares price levels to gauge purchasing power parity; it isn’t about how income is distributed either.