MyNews24 is a user-generated section of News24.com. The stories here come from users.

Reality

Article views: 682

## Lies, more lies, statistics

15 October 2012, 12:50
Every now and again the Government, or some other organisation, goes off about the Gini Coefficient that is so high in South Africa.

If you do not know by now what the Gini Coefficient is, let me give you a quote from wikipedia

"The Gini coefficient measures the inequality among values of a frequency distribution (for example levels of income). A Gini coefficient of zero expresses perfect equality where all values are the same (for example, where everyone has an exactly equal income). A Gini coefficient of one (100 on the percentile scale) expresses maximal inequality among values (for example where only one person has all the income)"

According to the Gini coefficient, South Africa has the highest score in the world, 63.1 as measured by the World Bank and 65.0 as measured by the CIA. (Wikipedia)

Wait a minute!!!! Why are there 2 values? 63.1 and 65.0? And this, boys and girls, is where the sh*t hits the fan.

To answer that I am going to show you what is the cause of the high Gini Coefficient in South Africa.

'Hau', you say 'Everybody knows that it is the huge difference in salaries between ordinary black and white people'.

'Uh?', I say....'Well, in that case, everybody is wrong because that it not what is causing it'

'Hau', you say, 'Everybody tells us that...everybody cannot be wrong at the same time?'

'Yes they can', I say. 'The High Gini coefficient in South Africa is caused by the +- 5 000 highest earners in South Africa. Take them out of the equation and South Africa's Gini Coefficient drops below 50 and South Africa becomes like any other ordinary country.'

To prove this I am going to give you a small lesson in how to calculate the Gini coefficient - actually I am going to cheat a bit because I am going to tell you how it works and then show you how to use an online Gini coefficient calculator. Furthermore, to make everybody understand it easier, I am going to assume that there are only 10 people in the country

Ok, let's start.

In this step you have group all the people according to their income per month or year.

Group
------------
Group1:   R0-R5000                7
Group2:   R5001-R10000        2
Group3:   R10001-R15000      0
Group4:   R15001-R20000      0
Group5:   R20001-R25000      0
Group6:   R25001-R30000      1

So, we have 7 people earning between R0-R5000, 2 people between R5001-R10000 and 1 rich guy earning R 30 000.

So, let's head over to http://www.peterrosenmai.com/lorenz-curve-graphing-tool-and-gini-coefficient-calculator
where we can calculate the gini coefficient. To do that , just type in the 7,2,0,0,0,1 on consecutive lines. When completed, click on Calculate.

Congratulations! You have just calculated your 1st Gini Coefficient. Look in the right of the graph next to the blue square and we see Gini = 70.00. How can it be so large? Surely there must be a mistake?

No mistake. Now do the following...Remove the 3 zeros and move the line with the 1 up so that you have only 7,2,1 on consecutive lines. Click on Calculate. Remarkably the Gini now comes down to Gini = 40.00

You can play around more if you like but what we see here is that the number of blocks with zero count an awful lot.

In South Africa, most people earn less than R 30 000 per month - blacks as well as whites. However, there are a few people earning R 100 000 and more per month. The more these rich people get, the more they increase the distance (number of 0 blocks)  between them and the rest of the population. Millionaires are bad for the Gini. Just think how billionaires mess it up!
Remove these guys from the calculation and South is just another ordinary Gini statistic.

The unusually large number of billionaires in South Africa compared to the number of ordinary citizens...the Ruperts, Openheimers, Motsepes..skew the Gini Coefficient considerably.

So, dear Government or other institutions, the next time you go off about white people being responsible for the high Gini.....know now that people know how to calculate it and can see through you.

Oh, and before I forget. The difference between the value for the World Bank and CIA is because they group it differently.

So, as they say...There are lies, more lies and then there is statistics.

Get Published!
Disclaimer: All articles and letters published on MyNews24 have been independently written by members of News24's community. The views of users published on News24 are therefore their own and do not necessarily represent the views of News24. News24 editors also reserve the right to edit or delete any and all comments received.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story

Get Published!

# Read more from our Users

Submitted by
Brett Bowes
###### Appoint Thuli Madonsela as new ND...

Madonsela's credentials are impeccable, she has been hardened to the rigors of chapter 9 leadership, and she would be the people's favourite. Read more...

Submitted by
Lindie Langa
###### Cyril did not say Zuma raped Khwe...

If it was an attempt by 702 to boost his presidential campaign, it was a dismal failed attempt. If it was an attempt to sabbotage his campaign, and feed fire on the divide in the ANC, they just may have succeeded. Read more...

Submitted by
FrancoisFMarais
###### Response to 'a Steinhoff guide fo...

If you think that our president, Jacob Zuma, can keep people busy for years in courts then you are in for a surprise on how complicated coming court cases in this matter can be.  Read more...

Submitted by
Freddie Jones
###### Just who is doing the 'overreachi...

Winning an election and becoming president of the Republic of South Africa does not hand one a carte blanche to become a dictator and do as one pleases. Read more...

Submitted by
ohomen171
###### A criminal trial For Zuma or Trum...

Recently I gave you my take on what happened in the regime change in Zimbabwe and to briefly summarize, those wishing to remove Mugabe from power were “stuck between a rock and a hard place". Read more...

Submitted by
Werner Roets180
###### Behind every great fortune, there...

This is an open letter directed at Markus Jooste, the Ex-CEO of Steinhoff international. We all have heroes...we all have people and public figures we look up to.  Read more...

Latest Multimedia by News24 users
Get Published!

### Jobs in Cape Town[change area]

#### Solutions Practice Development Support

Western Cape
Aquarius Recruitment

#### Storeman

Brackenfell
Persona Staff

#### Marketing Coordinator

Cape Town Northern Suburbs
Peoplefinder Career Placements

### Property[change area]

#### HOUSES FOR SALE IN Bellville, Welgedacht

Houses R 4 995 000

#### HOUSES FOR SALE IN Stellenbosch, Paradyskloof

Houses R 4 200 000

#### HOUSES FOR SALE IN Cape Town, Muizenberg

Houses R 2 500 000

### services

RSS feeds News delivered really simply.

E-mail Newsletters You choose what you want

News24 on Android Get the latest from News24 on your Android device.

SMS Alerts Get breaking news stories via SMS.

There are new stories on the homepage. Click here to see them.

English
Afrikaans
isiZulu

# Settings

Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.