What is Gini index?

Gini index is the most commonly used measure of inequality. Also referred as Gini ratio or Gini coefficient.

Gini index for binary variables is calculated in the example below.

Now we will calculate Gini index of student and inHostel.

Step 1:

Gini(X) = 1 – [(4/9)² + (5/9)²] = 40/81

Step 2:

Gini(Student = False) = 1 – [(1/5)² + (4/5)²] = 8/25

Gini(Student = True) = 1 – [(3/4)² + (1/4)²] = 3/8

GiniGain(Student) = Gini(X) – [4/9·

Gini(Student = True) + 5/9· Gini(Student = False)] = 0.149

Step 3:

Gini(inHostel = False) = 1 – [(2/4)² + (2/4)²] = 1/2 

Gini(inHostel = True) = 1 – [(2/5)² + (3/5)²] = 12/25

GiniGain(inHostel) = Gini(X) – [5/9· Gini(inHostel = True) + 4/9· Gini(inHostel = False)] = 0.005

Results

Best split point is Student because it has high gini gain.

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