Compare methods

	Theil Inequality Decomposition	Gini Coefficient
Field	Economics	Sociology
Family	Process / pipeline	Process / pipeline
Year of origin	1967	1912
Originator	Henri Theil (1967); decomposition class by Anthony Shorrocks (1980)	Corrado Gini
Type	Decomposable inequality measure	Scalar measure of statistical dispersion / inequality
Seminal source	Theil, H. (1967). Economics and Information Theory. Amsterdam: North-Holland. ISBN: 9780444814630	Ceriani, L., & Verme, P. (2012). The origins of the Gini index: extracts from Variabilità e Mutabilità (1912) by Corrado Gini. The Journal of Economic Inequality, 10(3), 421–443.
Aliases	Theil Index, Theil's T and L, Generalized Entropy Decomposition, Within-Between Inequality Decomposition	Gini index, Gini ratio, Gini concentration ratio, G
Related	3	5
Summary	The Theil index, introduced by Henri Theil in 1967 by importing Shannon's information theory into economics, measures income inequality as the divergence between each unit's income share and its population share. Its defining advantage is exact additive decomposability: total inequality splits cleanly into a within-group component (inequality inside each subgroup) and a between-group component (inequality between subgroup means). Theil's T and its companion L (mean log deviation) are the two best-known members of the generalized-entropy class, which Anthony Shorrocks showed in 1980 to be the only inequality measures that are additively decomposable in this way.	The Gini coefficient is the most widely used single-number summary of inequality in a distribution such as income or wealth. Introduced by the Italian statistician Corrado Gini in 1912, it equals twice the area between the Lorenz curve and the line of perfect equality, ranging from 0 when everyone has the same amount to a maximum approaching 1 when one unit holds everything.