The Faroe Islands had the lowest Gini coefficient in the Nordic region in 2018.
The Gini coefficient and the income quintile ratio (80/20) are two of the metrics used for describing a nation’s income disparity (other measurements can be found in the statbank.
Gini coefficient remains at 22.7
The Gini coefficient is used as a measure of income inequality. If all citizens in a country have the same income, the country’s income Gini coefficient would be 0. If one household earns all of the country’s income, the income Gini coefficient would be 100.
The Gini coefficient for 2018 is 22.7, which is the same as the previous year. For comparison, the 2018 Gini coefficient in Denmark was 27.8, in Iceland 23.4, in Norway 24.8, in Sweden 27.0 and in Finland 25.9.
The income quintile ratio remains at 3.1
The income quintile ratio] The income quintile ratio divides the population into five equally large groups (quintiles) and compares the total income of the 20% of the population with the highest income (top quintile) to that of the 20% with the lowest income (bottom quintile).
In 2018, the top quintile in the Faroe Islands had an income 3.1 times higher than the bottom quintile. As the graph and table below show, this ratio has remained steady in recent years. In 2009, the top quintile had an income 2.7 times higher than the bottom quintile.
Income figures have a one-year lag
Income statistics are based on tax authority TAKS’s tax list. This list is not completed until just over a year after the registration year when all income assessments have been concluded.
Equivalised disposable income
Rather than using the regular income of individuals or households, these statistics are based on an equivalised disposable income consisting of a household’s total income, divided by the number of household members converted into equalised persons weighed according to their age.