To determine the town with the smallest income gaps in every state, 24/7 Wall St. reviewed five-year estimates of the Gini Index of income inequality from the U.S. Census Bureau’s 2019 American Community Survey.
The Gini Index of income inequality summarizes income dispersion in an area on a scale from 0 to 1. A value of 0 indicates perfect equality — everyone in the area receives an equal share of income. A value of 1 indicates perfect inequality — only one recipient receives all the income.
We used census “place” geographies — a category that includes 29,573 incorporated legal entities and census-designated statistical entities. Of those, 29,319 had boundaries that fell within one of the 50 states, while the rest were in the District of Columbia or Puerto Rico.
We defined towns based on population thresholds — having at least 1,000 people and less than 25,000 people — and 13,332 of the places fell within these thresholds.
Towns were excluded if the Gini Index was not available in the 2019 ACS, if there were fewer than 1,000 housing units, or if the sampling error associated with a town’s data was deemed too high.
The sampling error was defined as too high if the coefficient of variation — a statistical assessment of how reliable an estimate is — for a town’s Gini Index was above 15% and greater than two standard deviations above the mean CV for all towns’ Gini Indices. We similarly excluded towns that had a sampling error too high for their population, using the same definition.
The remaining 7,698 places were ranked within their state based on their Gini Index. To break ties, we used the share of aggregate household income earned by the top 20% of households.
Additional information on average household income by quintile, share of aggregate household income by quintile, and median household income are also five-year estimates from the 2019 ACS.
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