will sometimes see Lorenz curves diagrams with the axis drawn around the wrong way. Students are also advised to include either numbers on their diagram to illustrate the examples on the diagram. @Mark Johnson, hThinking www.thinkib.net/Economics 5 INTHINKING Activity 5: Gini coefficient The Gini coefficient measures inequality in a numerical form and is calculated by the formulae A / (A+B). Each nation is ranked on the Gini scale from 0 to 1. Examples of Gini coefficients If the richest 1% of the population owned 50% of the nation's wealth / income this would mean a Gini coefficient of 50%. Other Gini coefficients African continent 0.52 - 0.7 Mid ranking nations 0.3 - 0.4 Lowest Gini coeffcients were in Europa and ranged from 0.25 - 0.36. (a) Explain possible reasons for different levels of income inequality between nations? (b) Why might a household be living in poverty as a result of low income levels? @Mark Johnson. hThinking www.thinkib.not/Economics 6 INTHINKING