Study ranks Arkansas eighth out of 50 states for income inequality

A study by personal finance site GoBankingRates.com found that Arkansas ranked eighth out of the 50 states for income inequality.

The study utilized data from the U.S. Census American Community Survey to develop a Gini index.

A Gini index is a mathematical calculation of a state’s income dispersion. After the formula is run, a number between one and zero is the result, where zero is perfect income equality.

According to the index, Arkansas’ Gini coefficient is 0.4807.

The study’s authors found that the average income for the bottom 20% of Arkansans was $13,044, while the top 20% brought home an average of $212,270. Narrowing it further, the top 5% of the state’s population has an income of $385,873.

Breaking down the Arkansas income numbers, the study showed the bottom 20% have a 3.16% share of wealth, while the top 20% have a 51.43% share. The top 5% holds a 23.37% share.

For bordering states, Mississippi was one spot higher than Arkansas at seventh with a 0.4840 Gini score. Louisiana was ranked third, with a Gini score of 0.4944.

Missouri, Oklahoma, and Texas were ranked 22nd, 26th, and 16th, respectively, in the study.

New York, where the top 5% earned an average of $600,000, ranks first in the study with a 0.5152 Gini score, and Utah came in at 50 with a 0.4277 score.

The study found that out of the 50 states, 41 had the bottom 20% making less than $20,000 on average, while the top 20% were over $250,000 in 25 states.