Simply put, the Gini coefficient is a statistical measure used to calculate inequality within a nation. Originally thought of by Corrado Gini in 1912, it is most commonly used to measure income inequality.
In economics, an externality refers to a cost or benefit that is imposed onto a third party. These can come in the form of ‘positive externalities’ — that create a benefit to a third party. Or, ‘negative externalities’ — that create a cost to a third party.