Gini index: looks like stuff from nerd of finance, and instead it will be necessary for the new government to know about it. And also well, possibly.
What is the Gini Index? Nothing less than a measure of the inequality of a distribution studied by the Italian statistician Corrado Gini (1884-1965), used as a benchmark for income inequality or of wealth: low values of the Gini index indicate a fairly homogeneous distribution, high values are the indicator of a more unequal distribution, with a greater concentration in a few individuals.
THE GINI INDEX IN ITALY
All very interesting, but why are we talking about it? Because, as mentioned, in mid-March the Bank of Italy released the new edition of its Survey on Italian household budgets, referring to 2016.
- The average equivalent income increased by 3,5%. of households compared to 2014 (the year of the previous survey), but there are still 11 percentage points to go back to the 2006 peak, i.e. the pre-crisis period.
- Inequality has grown, "Back near the levels prevailing in the late XNUMXs."
- The number of people at risk of poverty has increased (whose threshold in 2016 was set at approximately 830 euros of monthly income). 23% of the Italian population is in this condition, "a very high level", even higher than at the end of the XNUMXs.
A PROBLEM (ALSO) GENERATIONAL
From the table on the incidence of individuals at risk of poverty by characteristics of the householder taken from the Bank of Italy survey, it is clear how this risk is higher among households with younger householders born abroad and among households residing in the South, while it is lower for households whose head of household is over 65 or retired.
The comparison with 2006 reveals that the risk of poverty has increased in all age groups except for the over 65s, who have seen their condition improve. The increase recorded by 35-45 year olds (+11,4%) is particularly worrying.
The risk increases in the north and in the center while it decreases in the south, where however – beyond the very modest negative variation (-0,1%) – the percentage remains very high (more than a third are at risk of poverty). As for the professions, things are a little better only for retirees.
INCOME IS GROWING, BUT NOT EVENLY
The annual family income, according to the survey, in 2016 amounted on average to 30.700 euros (net of income taxes and social contributions), in line with the previous survey (30.600 euros in 2014), while it increased substantially more significant, for the first time since the beginning of the crisis, is the average equivalent income (calculated according to a method which makes the incomes of families of different sizes and compositions equivalent).
The share of families who declared they were able to save increased, while the number of those who said they made it to the end of the month with difficulty decreased. But – here's the catch – real equivalised income growth has not been uniform: households with employees fared better than the others.
A MORE DIVIDED ITALY
Two graphs taken from the Bank of Italy survey show us how the inequality of distribution has increased both on the income side and on the wealth side.
In the graph that we propose below (and which we take from the Bank of Italy survey), we can see how the Gini index of equivalent income in 2016 rose to 33,5%, from about 33% in 2012 and 2014 And it is also clear how, in the previous 10 years, which followed the global crisis, the level of inequality increased by 1,5%.
An increase which, as the authors of the survey point out, brought our country back close to the levels reached at the end of the XNUMXs.
In this second graph, it can be seen that in 2016 inequality also increased in terms of household net wealth, after the peak in 2012 and the decline recorded thereafter.
AN ASYMMETRIC WEALTH
Still on the subject of the wealth of Italian families, another interesting input comes from its average value (i.e. the sum of all wealth divided by the number of families) and the median value (i.e. the one that is exactly in the middle between the two extremes): in 2016, against an average wealth of around 206 thousand euros, the median value - which therefore marked the watershed between the poorest half and the richest half of families - was equal to 126 thousand euros, therefore significantly more low, thus reflecting “the strong asymmetry of the distribution”.
We close with three figures that offer us a summary of the situation updated to 2016:
- the bottom 30% of households hold 1% of net wealth (equal to about 6.500 euros on average) and three quarters of these families are also at risk of poverty;
- the top 30% of households own about 75% of net worth recorded overall and the average net wealth of this 30% is equal to 510.000 euros;
- over 40% of net wealth held by the richest 30% is held by the 5% of this group, which boasts an average net worth of 1,3 million euros.
