What is the most common measure of inequality and what is inequality itself?

Inequality is present in income, opportunity and wealth amongst others. Income inequality is the most common form of inequality and it takes into consideration the difference in incomes amongst individuals in a country. For example, everyone that lives in your neighbourhood does not earn the same amount of money and this creates income inequality. Income inequality is a problem that arises specially in developed countries where the difference between the rich and the poor is more than evident. The US is one of the countries with more income inequality.

The most common measure of income inequality is the Gini Coefficent. this is a number between 0 and 1. The value 0 corresponds to a perfectly equal economy, where all individuals have equal disposable incomes. On the contrary, the value of 1 corresponds to the most extreme cases of inequality. The latest value of the Gini coefficent for the UK is 0.34.