How can one number measure how unequal a country is?

The Gini coefficient squeezes a whole country's distribution of income into a single number from 0 to 1. A score of 0 means perfect equality, with everyone having the same. A score of 1, or 100 percent, means maximal inequality: a single person has all the income and everyone else has none. Real countries land in between, and the higher the number, the more unequal the country.

The idea came from the Italian statistician Corrado Gini, who published it in his 1912 paper. He built on the work of the economist Max Lorenz. Imagine lining everyone up from poorest to richest and plotting how much of the total income the bottom part of the population earns cumulatively. If everyone earned the same, that line would be perfectly straight. In reality it bows below the straight line. The Gini coefficient measures that gap: the area between the line of equality and the actual curve, divided by the whole area under the line of equality.

The numbers give a feel for the scale. After taxes and transfers, OECD countries in the late 20th century ranged from 0.24, in Slovakia, to 0.49, in Mexico. Before taxes, South Africa had the world's highest figure in 2008 and 2009, estimated at 0.63 to 0.7, which fell to 0.52 after social assistance and to 0.47 after taxation.

A single number is handy, but it hides a lot. Bangladesh and the Netherlands both had an income Gini of 0.31 in 2010, even though their quality of life, opportunities and incomes were very different. The Gini tells you how equally a pie is shared, not how big the pie is.