Gini Coefficient - Other Uses

Other Uses

Although the Gini coefficient is most popular in economics, it can in theory be applied in any field of science that studies a distribution. For example, in ecology the Gini coefficient has been used as a measure of biodiversity, where the cumulative proportion of species is plotted against cumulative proportion of individuals. In health, it has been used as a measure of the inequality of health related quality of life in a population. In education, it has been used as a measure of the inequality of universities. In chemistry it has been used to express the selectivity of protein kinase inhibitors against a panel of kinases. In engineering, it has been used to evaluate the fairness achieved by Internet routers in scheduling packet transmissions from different flows of traffic. In statistics, building decision trees, it is used to measure the purity of possible child nodes, with the aim of maximising the average purity of two child nodes when splitting, and it has been compared with other equality measures.

The Gini coefficient is sometimes used for the measurement of the discriminatory power of rating systems in credit risk management.

The discriminatory power refers to a credit risk model's ability to differentiate between defaulting and non-defaulting clients. The formula, in calculation section above, may be used for the final model and also at individual model factor level, to quantify the discriminatory power of individual factors. It is related to accuracy ratio in population assessment models.