Calculation formula for Theil index
The calculation formula for Theil index measures inequality within a population or group. It provides a numerical value that represents the level of disparity in income or distribution of resources. To compute the Theil index, one needs data on individual incomes or resource allocations. The formula involves summation and logarithmic functions to capture the variation in the distribution. Theil index values range from 0 to 1, with 0 indicating perfect equality and 1 representing extreme inequality. This index is a valuable tool for policymakers, economists, and sociologists, as it helps assess and address socio-economic disparities and design targeted interventions for a more equitable society.
Read more
Formula for calculating Gini coefficient
The Gini coefficient is a measure of income inequality within a population. It ranges from 0 to 1, with 0 representing perfect equality and 1 representing extreme inequality. To calculate the Gini coefficient, you need to follow a specific formula. First, arrange the incomes of the population in ascending order. Next, calculate the cumulative percentages of the population and the cumulative percentages of income. Then, plot these values on a graph. Finally, use the graph to calculate the area between the Lorenz curve and the line of perfect equality. This area divided by the area under the line of perfect equality gives you the Gini coefficient.
Read more
Formula
Formula, a precise equation that unlocks the mysteries of the universe. It embodies complexity and simplicity in unison. It is a key that opens doors to knowledge and understanding. A formula is a magical script, written by countless minds seeking to decode the patterns of existence. It is the melody of science, playing harmoniously with logic. Formulas dance across pages, guiding us through the labyrinth of numbers, revealing hidden truths with each step. They illuminate the darkness of uncertainty, bringing clarity and certainty to our quest for knowledge. The power of a formula lies in its elegance, a blend of precision and intuition that transcends mere calculations. It is a symphony of intellect, composed by the greatest minds in human history.
Read more
