Economic inequality

Economic inequality, also known as income inequality and wealth inequality, is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries. Economists generally focus on economic disparity in three metrics: wealth, income, and consumption. The issue of economic inequality can be relevant to notions of equity, equality of outcome, and equality of opportunity. Some studies point to inequality as a growing social problem. Too much inequality can be destructive, because income inequality and wealth concentration can hinder long term growth.

Too much equality can also be destructive by decreasing the incentive for productivity and the desire to take risks and create wealth. There is ultimately a trade-off between equality and productivity. A central question in discussions about economic inequality is what constitutes an "optimal" level of economic inequality.

Economic inequality varies between societies, historical periods, economic structures and systems. The term can refer to cross sectional distribution of income or wealth at any particular period, or to the lifetime income and wealth over longer periods of time. There are various numerical indices for measuring economic inequality. A widely used one is the Gini coefficient, but there are also many other methods.