A Gini coefficient value above 0.4 is generally considered to indicate what?

• A. Low inequality
• B. High inequality
• C. Medium inequality
• D. No inequality

Answer: (B)

The key idea is how to read a Gini coefficient: it measures how unequally income or wealth is distributed. Values near 0 mean people are fairly equal; values near 1 mean a lot of the income is held by a few. So a value above 0.4 indicates a fairly pronounced level of inequality because the distribution significantly departs from perfect equality. In many analyses, that level is labeled high inequality, rather than low or medium. It’s not indicating no inequality (that would be 0), and it’s not a moderate, mid-range figure either—the deviation from equality is substantial.