Feb 022011

Several chapters of Geo-Mexico: the geography and dynamics of modern Mexico look at inequalities in Mexico. The inequalities considered include inequalities related to physical geography (eg water availability), population dynamics (eg fertility rates), gender (eg. female employment), economics (eg GDP/person), development indices (eg HDI) and the distribution of wealth within the country, or within a subset of the country’s residents, such as those who live in a particular state.

Taking the country as a whole, Mexico has a very unequal distribution of wealth:

In 2005, the per person income for the richest 10% of the population in Mexico was $44,035. This figure is over four times the national average, indicating that per person income in Mexico is very unequally distributed. In fact only two countries—Brazil and South Africa—in the top twenty-five economies are more unequal. The average for all twenty-five countries is about three times the national average. The distribution in Japan and Italy is far more equitable; in both countries, the highest 10% get only about twice the national average. [Geo-Mexico, p 89]

If we want a more precise measure of how unevenly distributed the wealth or income is in a country, it is possible to calculate the country’s Gini coefficient. The Gini coefficient, or index, was developed by Italian statistician Corrado Gini :

Without going into all the mathematical details, Gini index values range from 0 (perfect equality) to 100 (extreme inequality with all wealth in the hands of a single individual).The Gini index at a national scale usually falls between 25 and 70. It provides a very useful way to compare income inequalities between countries or to analyze trends in income inequality over time.

In general, the Gini index loosely correlates with development, since most developed countries have lower Gini values (usually below 36) than more developing countries where the values often exceed 40. However, there are many notable exceptions. The USA has a Gini index of 45, higher than might be expected, and Bangladesh and Ethiopia both have relatively low Gini values of 33 and 30 respectively.

Mexico’s Gini index of 48 is high, indicating that inequality remains a real issue. Is Mexico’s inequality of wealth increasing or diminishing? There is little evidence that the GINI index has fallen significantly since the 1990s, though we will return to this question in a future post.

One important thing to note is that in Mexico’s case, its informal sector (not reflected in Gini calculations) may serve to ameliorate the degree of income disparities suggested by the Gini figure taken on its own. Some economists suggest that countries with such high Gini indexes need to double their rates of economic growth before they will succeed in reducing their incidence of poverty. [Geo-Mexico 89-90]

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